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Stock Market Outlook for May 9, 2018

Skills mismatch presenting the perfect recipe for wage inflation.

Real Time Economic Calendar provided by Investing.com.

 

 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

Artesian Resources Corp. (NASD:ARTNA) Seasonal Chart

Artesian Resources Corp. (NASD:ARTNA) Seasonal Chart

C&F Financial Corp. (NASD:CFFI) Seasonal Chart

C&F Financial Corp. (NASD:CFFI) Seasonal Chart

DexCom Inc. (NASD:DXCM) Seasonal Chart

DexCom Inc. (NASD:DXCM) Seasonal Chart

Alliant Energy Corp. (NYSE:LNT) Seasonal Chart

Alliant Energy Corp. (NYSE:LNT) Seasonal Chart

AGT Food and Ingredients Inc (TSE:AGT) Seasonal Chart

AGT Food and Ingredients Inc (TSE:AGT) Seasonal Chart

Canadian Western Bank (TSE:CWB) Seasonal Chart

Canadian Western Bank (TSE:CWB) Seasonal Chart

AmTrust Financial Services, Inc. (NASD:AFSI) Seasonal Chart

AmTrust Financial Services, Inc. (NASD:AFSI) Seasonal Chart

Bank Of Montreal (NYSE:BMO) Seasonal Chart

Bank Of Montreal (NYSE:BMO) Seasonal Chart

Absolute Software Corp. (TSE:ABT) Seasonal Chart

Absolute Software Corp. (TSE:ABT) Seasonal Chart

 

The Markets

Stocks waivered on Tuesday as investors reacted to the announcement that Donald Trump would withdraw the US from the Iran nuclear deal.  The S&P 500 Index closed essentially unchanged, remaining pinned to the upper limit of the descending triangle pattern that has been widely telegraphed in recent weeks.  Momentum indicators on the large-cap benchmark are about as neutral as you can get with MACD hovering around “0” and RSI holding around 50.  A catalyst may be required to free the benchmark from its upper and lower bounds.

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On the economic front, a report on job opening and labour turnover indicated that openings continue to grow as companies attempt to expand in this new tax era.  The headline print for the March Job Openings and Labour Turnover Survey (JOLTS) indicated that there was 6.55 million opportunities available in the month, firmly above the 6.1 million forecasted by analysts.  Stripping out the seasonal adjustments, openings actually increased by 9.7% in the month, more than double the average increase for the month of 4.1%.  Year-to-date, openings are higher by 23.9%, representing the second best first quarter increase on record.  But while openings trend well above average, the change in hires is lagging its seasonal norm, emphasizing the skills mismatch that is ongoing within the economy.  Many of those openings are coming from the technology sector where the advanced skills required for this digital economy are largely absent in the current workforce.  The scenario is the perfect recipe for wage inflation as employers pay up for the talent required to fill open positions.  As for the gauge of employee confidence, the quit rate continues to lag its seasonal average trend for the same reason that openings are trending above average.  Quits in the technology sector are running well below average, as are quits in the  professional and business services category, effectively those areas of the economy that require skilled workers to fill the positions.  So skilled workers are content in their positions, there just aren’t enough skilled workers.  Overall, this was another strong report on the economy, but it does suggest that the economy is functioning well below its full potential, something that is unlikely to be rectified anytime soon.

Job Openings: Total Nonfarm Seasonal Chart

Monthly Job Openings: Total Nonfarm Data

Job Openings: Total Nonfarm Seasonal Chart

Quits: Total Nonfarm Seasonal Chart Hires: Total Nonfarm Seasonal Chart Layoffs and Discharges: Total Nonfarm Seasonal Chart Hires: Total Private Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.83.

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Seasonal charts of companies reporting earnings today:

Albemarle Corporation (ALB) Seasonal Chart Ambev S.A. (ABEV) Seasonal Chart Ameren Corporation (AEE) Seasonal Chart Anheuser-Busch Inbev SA (BUD) Seasonal Chart Cara Therapeutics, Inc. (CARA) Seasonal Chart Century Casinos, Inc. (CNTY) Seasonal Chart CenturyLink, Inc. (CTL) Seasonal Chart Chesapeake Utilities Corporation (CPK) Seasonal Chart Cincinnati Bell Inc (CBB) Seasonal Chart Cinemark Holdings Inc (CNK) Seasonal Chart Compugen Ltd. (CGEN) Seasonal Chart Craft Brew Alliance, Inc. (BREW) Seasonal Chart Dun & Bradstreet Corporation (The) (DNB) Seasonal Chart Eagle Bulk Shipping Inc. (EGLE) Seasonal Chart Enbridge Energy, L.P. (EEP) Seasonal Chart Energy Transfer Equity, L.P. (ETE) Seasonal Chart Energy Transfer Partners, L.P. (ETP) Seasonal Chart First Majestic Silver Corp. (AG) Seasonal Chart Fortuna Silver Mines Inc. (FSM) Seasonal Chart Franco-Nevada Corporation (FNV) Seasonal Chart General Finance Corporation (GFN) Seasonal Chart Horizon Pharma plc (HZNP) Seasonal Chart IAC/InterActiveCorp (IAC) Seasonal Chart Lincoln Educational Services Corporation (LINC) Seasonal Chart Matrix Service Company (MTRX) Seasonal Chart Mylan N.V. (MYL) Seasonal Chart Nuance Communications, Inc. (NUAN) Seasonal Chart Office Depot, Inc. (ODP) Seasonal Chart Open Text Corporation (OTEX) Seasonal Chart Pan American Silver Corp. (PAAS) Seasonal Chart Radiant Logistics, Inc. (RLGT) Seasonal Chart Sunoco LP (SUN) Seasonal Chart Synaptics Incorporated (SYNA) Seasonal Chart Toyota Motor Corp Ltd Ord (TM) Seasonal Chart Twenty-First Century Fox, Inc. (FOXA) Seasonal Chart Weibo Corporation (WB) Seasonal Chart

 

S&P 500 Index

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TSE Composite

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