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Stock Market Outlook for June 7, 2018

Abrupt decline in gasoline production contributing to the increase in oil inventories.

 

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:

Dominion Resources, Inc. (NYSE:D) Seasonal Chart

Dominion Resources, Inc. (NYSE:D) Seasonal Chart

WGL Holdings Inc. (NYSE:WGL) Seasonal Chart

WGL Holdings Inc. (NYSE:WGL) Seasonal Chart

Espey Mfg. & Electronics Corp. (AMEX:ESP) Seasonal Chart

Espey Mfg. & Electronics Corp. (AMEX:ESP) Seasonal Chart

Duke Energy Corporation  (NYSE:DUK) Seasonal Chart

Duke Energy Corporation (NYSE:DUK) Seasonal Chart

International Paper Company  (NYSE:IP) Seasonal Chart

International Paper Company (NYSE:IP) Seasonal Chart

Nathans Famous, Inc. (NASD:NATH) Seasonal Chart

Nathans Famous, Inc. (NASD:NATH) Seasonal Chart

 

 

The Markets

Stocks gained for a fourth straight session on Wednesday as investors continued to set aside geopolitical concerns, picking up stocks in beaten down sectors from recent weeks.  The S&P 500 Index gained close to nine-tenths of one percent, led by financials and materials; utilities offset the positive results on the day, falling by 2.38% on the session as yields rose.  And just like that, the S&P 500 Index is within points of fulfilling the short-term reverse head-and-shoulders pattern highlighted in Tuesday’s report.   Horizontal and psychological resistance at 2800 remains the next big level to watch.

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On schedule for the Wednesday session was the weekly petroleum status report.  The EIA indicated that oil inventories increased by 2.1 million barrels last week, while gasoline increased by 4.6 million barrels.  The net result saw the days of supply of oil fall by two-tenths of a day to 25.8, while gasoline saw a full day increase to 25.2.  A rather abrupt downturn in the production of gasoline, coinciding with a sharp drop in the level of gasoline product supplied, is behind the oil inventory build, likely to carry over to future weeks.  The trend of oil inventories so far in 2018 is that of higher-highs and higher-lows, risking a further divergence in the year-to-date change versus the seasonal norm.  Domestic production of the raw input continues to hit record levels, pressuring inventory levels further.  Questions pertaining to the strength of demand heading further into the summer driving season are lingering as the price of gas hovers around the highest levels in years.

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Weekly U.S. Days of Supply of Crude Oil excluding SPR (Number of Days) Seasonal Chart

Weekly U.S. Ending Stocks excluding SPR of Crude Oil Seasonal ChartWeekly U.S. Field Production of Crude Oil Seasonal ChartWeekly U.S. Commercial Crude Oil Imports Excluding SPR Seasonal Chart

Weekly U.S. Days of Supply of Total Gasoline  (Number of Days) Seasonal Chart

Weekly U.S. Days of Supply of Total Gasoline (Number of Days) Seasonal Chart

Weekly U.S. Ending Stocks of Total Gasoline Seasonal Chart Weekly U.S. Refiner and Blender Adjusted Net Production of Finished Motor Gasoline Seasonal Chart Weekly U.S. Product Supplied of Finished Motor Gasoline Seasonal Chart

The price of oil closed lower by 1.21% following the result, continuing to hover around rising trendline support.  The next period of seasonal strength comes into play around the second to last week of June.

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Crude Oil Futures (CL) Seasonal Chart

Touching briefly on the Merchandise Trade report released out of Canada, Statscan is indicating that the deficit shrank in April, falling to $1.9 Billion from $4.1 billion previous.  A 1.6% rise in exports and a 2.5% decline in imports was behind the headline result.  Turning directly to the year-to-date, unadjusted trends, exports are running 2.1% below the seasonal norm, while imports are trending just about inline with the historical average.  A nearly 4% rise in the Canadian dollar, relative to its US counterpart, over the past year has acted as a headwind to export activity and uncertainties surrounding trade doesn’t help.  Seasonally, both import and export activity tends to remain rather flat through the second quarter before falling in the month of July as the summer factory shutdown period takes a toll on activity.  For a complete breakdown of the results, the charts have been uploaded to the seasonal chart database at https://charts.equityclock.com/canadian-international-merchandise-trade-exports-imports

Total Exports of all merchandise Seasonal Chart

Monthly Total Exports of all merchandise Data

Total Imports of all merchandise Seasonal Chart

Monthly Total Imports of all merchandise Data

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

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Seasonal charts of companies reporting earnings today:

Advaxis, Inc. (ADXS) Seasonal Chart  Broadcom Inc. (AVGO) Seasonal Chart Capstone Turbine Corporation (CPST) Seasonal Chart  Conn's, Inc. (CONN) Seasonal Chart  Ferrellgas Partners, L.P. (FGP) Seasonal Chart FuelCell Energy, Inc. (FCEL) Seasonal Chart  Iteris, Inc. (ITI) Seasonal Chart J.M. Smucker Company (The) (SJM) Seasonal Chart  The Cooper Companies, Inc. (COO) Seasonal Chart Vail Resorts, Inc. (MTN) Seasonal Chart Verint Systems Inc. (VRNT) Seasonal Chart Zumiez Inc. (ZUMZ) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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