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Stock Market Outlook for July 27, 2018

Report on Durable Goods suggesting that the red hot manufacturing sector is starting to cool.

 

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:

CPB, Inc. (NYSE:CPF) Seasonal Chart

CPB, Inc. (NYSE:CPF) Seasonal Chart

Allegiant Travel Co. (NASD:ALGT) Seasonal Chart

Allegiant Travel Co. (NASD:ALGT) Seasonal Chart

Mettler Toledo Intl, Inc. (NYSE:MTD) Seasonal Chart

Mettler Toledo Intl, Inc. (NYSE:MTD) Seasonal Chart

NYSE GOLD BUGS INDEX ($HUI) Seasonal Chart

NYSE GOLD BUGS INDEX ($HUI) Seasonal Chart

Tetra Tech, Inc. (NASDAQ:TTEK) Seasonal Chart

Tetra Tech, Inc. (NASDAQ:TTEK) Seasonal Chart

McDonald's Corporation  (NYSE:MCD) Seasonal Chart

McDonald’s Corporation (NYSE:MCD) Seasonal Chart

Autodesk, Inc.  (NASDAQ:ADSK) Seasonal Chart

Autodesk, Inc. (NASDAQ:ADSK) Seasonal Chart

Exchange Income (TSE:EIF) Seasonal Chart

Exchange Income (TSE:EIF) Seasonal Chart

Telus Corp. (NYSE:TU) Seasonal Chart

Telus Corp. (NYSE:TU) Seasonal Chart

Chevron Corporation  (NYSE:CVX) Seasonal Chart

Chevron Corporation (NYSE:CVX) Seasonal Chart

Roper Technologies, Inc. (NYSE:ROP) Seasonal Chart

Roper Technologies, Inc. (NYSE:ROP) Seasonal Chart

 

 

The Markets

Stocks closed mixed as a selloff in the technology sector weighed on the broader market.  An almost 19% plunge in shares of Facebook (FB) had investors trimming their exposure to technology stocks.  The S&P 500 Index closed down by three-tenths of one percent, falling back from a convergence of resistance around 2850. 

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On the economic front, a report on Durable Goods Orders showed a rather disappointing result on the headline print.  Orders are indicated to have gained 1.0% in June, which was well short of the consensus analyst estimate that called for a gain of 3.2%.  Excluding transportation, the 0.4% gain also missed estimates calling for a 0.5% rise.  Stripping out the seasonal adjustments, the Value of Manufacturers’ New Orders for Capital Goods Industries actually increased by 17.5%, which is short of the 19.4% increase that is average for the month of June.  Putting the results in context of the year-to-date trend, there is little reason for concern, as of yet.  Orders are running 6.9% above average through the first half of the year, which is the third best performance of this economic cycle.  Orders for Defense Capital Goods are surging, running a whopping 30.1% above average through the first six months of the year.  But non-defense, orders are running a mere 1.9% above the seasonal norm.  Signs are emerging that the very hot manufacturing sector is starting to cool, perhaps the result of the threat of tariffs impacting activity.  As for inventories, they are showing a year-to-date change that is inline with the seasonal average trend, suggesting that we have yet to see supply issues that would force business to cut back on activity.  Seasonally, orders dip into July and August as summer factory shutdowns limit activity.

Value of Manufacturers' New Orders for Capital Goods Industries  Seasonal Chart

Monthly Value of Manufacturers' New Orders for Capital Goods Industries  Data

Value of Manufacturers’ New Orders for Capital Goods Industries Seasonal Chart

Value of Manufacturers' New Orders for Capital Goods - Nondefense  Seasonal Chart Value of Manufacturers' New Orders for Capital Goods - Nondefense excluding Aircraft  Seasonal Chart Value of Manufacturers' Total Inventories for Capital Goods Industries  Seasonal Chart Value of Manufacturers' New Orders for Consumer Goods: Durable Goods Excluding Transportation Industries Seasonal Chart Value of Manufacturers' New Orders for Consumer Goods: Durable Goods Excluding Defense Industries Seasonal Chart Value of Manufacturers' New Orders for Capital Goods: Defense Capital Goods Industries Seasonal Chart Value of Manufacturers' New Orders for Durable Goods Industries: Transportation Equipment Seasonal Chart

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.74.  This is the second lowest level since the lows charted in January, which was attributed to a period of complacency.

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Sectors and Industries entering their period of seasonal strength:

PHLX Gold/Silver Sector Seasonal Chart

$XAU Relative to the S&P 500
$XAU Relative to the S&P 500

$XAU Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

AbbVie Inc. (ABBV) Seasonal Chart Aon plc (AON) Seasonal Chart Autoliv, Inc. (ALV) Seasonal Chart Barnes Group, Inc. (B) Seasonal Chart Cabot Oil & Gas Corporation (COG) Seasonal Chart Chevron Corporation (CVX) Seasonal Chart Colgate-Palmolive Company (CL) Seasonal Chart ENI S.p.A. (E) Seasonal Chart Exxon Mobil Corporation (XOM) Seasonal Chart Franklin Resources, Inc. (BEN) Seasonal Chart Imperial Oil Limited (IMO) Seasonal Chart Iron Mountain Incorporated (IRM) Seasonal Chart Merck & Company, Inc. (MRK) Seasonal Chart Phillips 66 (PSX) Seasonal Chart The Goodyear Tire & Rubber Company (GT) Seasonal Chart Ventas, Inc. (VTR) Seasonal Chart Weatherford International plc (WFT) Seasonal Chart Weyerhaeuser Company (WY) Seasonal Chart Zimmer Biomet Holdings, Inc. (ZBH) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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