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Stock Market Outlook for August 8, 2018

Outside reversal candlesticks on Canadian benchmarks suggesting caution.

 

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:

Southwest Gas Corporation  (NYSE:SWX) Seasonal Chart

Southwest Gas Corporation (NYSE:SWX) Seasonal Chart

Cantel Medical Corp. (NYSE:CMD) Seasonal Chart

Cantel Medical Corp. (NYSE:CMD) Seasonal Chart

SEACOR Holdings Inc. (NYSE:CKH) Seasonal Chart

SEACOR Holdings Inc. (NYSE:CKH) Seasonal Chart

ViaSat, Inc. (NASD:VSAT) Seasonal Chart

ViaSat, Inc. (NASD:VSAT) Seasonal Chart

STMicroelectronics NV (NYSE:STM) Seasonal Chart

STMicroelectronics NV (NYSE:STM) Seasonal Chart

United States Cellular Corp. (NYSE:USM) Seasonal Chart

United States Cellular Corp. (NYSE:USM) Seasonal Chart

Southern Copper Corp (NYSE:SCCO) Seasonal Chart

Southern Copper Corp (NYSE:SCCO) Seasonal Chart

 

 

The Markets

Stocks in the US gained on Tuesday, pushing the S&P 500 Index beyond horizontal resistance at 2850.  For the ETF that tracks the large-cap benchmark (SPY), the gain of around three-tenths of one percent was enough to push the investment to a new all-time high.  The ETF has charted a series of higher-highs and higher-lows since the start of May, just when the historically weaker time of year for stocks begins.  Above average strength in economic activity has been a positive influence.

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Gains during the session were led by energy, financial, and industrial stocks, stealing flows away from consumer staples and utilities, which had led the market higher in the previous week.  This cyclical bias, while not typical for this time of year, tends to be conducive for gains in broader market benchmarks.  Each benchmark is up against horizontal levels of resistance, marking a make-or-break point to the weak trend that dominated the front half of the year.  Seasonally, industrials, consumer discretionary, materials, and financials tend to drag on broad market indices through the end of the third quarter.

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North of the border, market action didn’t look nearly as bullish.  The TSX Composite shed just over eight-tenths of one percent, falling back to its 50-day moving average.  Outside reversal candlesticks are apparent across a number of the market sectors.  Perhaps the more notable is the outside reversal candlestick on the S&P/TSX Capped Financial Services Index, which fell from resistance around 305.  A reverse head-and-shoulders pattern has been apparent on the chart, but Tuesday’s trading activity increases the risks of a rejection at neckline resistance.  Seasonally, the Canadian bank stocks tend to drift higher, on average, through the third quarter as investors add exposure ahead of the release of earnings at the end of August.

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S&P/TSX Capped Financial Index Seasonal Chart

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

$SPTFS Monthly Averages

On the economic front, a report on job openings and labour turnover indicated continued strong demand for labour, but the lack of qualified candidates to fill open positions.  The headline print for June’s Job Openings and Labor Turnover Survey (JOLTS) indicated that openings were essentially unchanged at 6.662 million, edging past the consensus estimate that called for a print of 6.65 million.  Stripping out the seasonal adjustments, openings were actually lower by 0.6%, while is better than the 2.2% decline that is average for June.  The year-to-date change in openings is now 11.5% above average, representing the second best performance through the first half of the year on record.  Supporting the result into the start of summer is the growing opportunities in construction and manufacturing, which are rising during a period when they have typically fallen leading into the summer shutdown period.  Hires, meanwhile, showed no change, on a non-adjusted basis, keeping the year-to-date change around the seasonal norm.  The lack of qualified applicants is capping hiring activity, in part due to the ongoing skills gap and declining supply of labour.  The result is holding the economy back from achieving its full potential.  Seasonally, hires, according to this metric, tend to peak in the month of June, then decline through the back half of the year.

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 0.92.

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Sectors and Industries entering their period of seasonal strength:

Gas Utilities Industry Seasonal Chart
S5GASU Index Relative to the S&P 500S5GASU Index Relative to the Sector

S5GASU Index Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

ACADIA Pharmaceuticals Inc. (ACAD) Seasonal Chart   CECO Environmental Corp. (CECE) Seasonal Chart CenturyLink, Inc. (CTL) Seasonal Chart Charles River Laboratories International, Inc. (CRL) Seasonal Chart Choice Hotels International, Inc. (CHH) Seasonal Chart Cincinnati Bell Inc (CBB) Seasonal Chart Comstock Resources, Inc. (CRK) Seasonal Chart Consolidated Water Co. Ltd. (CWCO) Seasonal Chart Craft Brew Alliance, Inc. (BREW) Seasonal Chart CVS Health Corporation (CVS) Seasonal Chart Diamondback Energy, Inc. (FANG) Seasonal Chart Dun & Bradstreet Corporation (The) (DNB) Seasonal Chart Energy Transfer Equity, L.P. (ETE) Seasonal Chart Energy Transfer Partners, L.P. (ETP) Seasonal Chart Flowserve Corporation (FLS) Seasonal Chart Franco-Nevada Corporation (FNV) Seasonal Chart IAC/InterActiveCorp (IAC) Seasonal Chart Iamgold Corporation (IAG) Seasonal Chart Jack In The Box Inc. (JACK) Seasonal Chart Magna International, Inc. (MGA) Seasonal Chart Manulife Financial Corp (MFC) Seasonal Chart Michael Kors Holdings Limited (KORS) Seasonal Chart Monster Beverage Corporation (MNST) Seasonal Chart Murphy Oil Corporation (MUR) Seasonal Chart Mylan N.V. (MYL) Seasonal Chart New York Times Company (The) (NYT) Seasonal Chart Nuance Communications, Inc. (NUAN) Seasonal Chart Occidental Petroleum Corporation (OXY) Seasonal Chart Pan American Silver Corp. (PAAS) Seasonal Chart Royal Gold, Inc. (RGLD) Seasonal Chart Southern Company (The) (SO) Seasonal Chart Stantec Inc (STN) Seasonal Chart Sun Life Financial Inc. (SLF) Seasonal Chart Sunoco LP (SUN) Seasonal Chart Thomson Reuters Corp (TRI) Seasonal Chart Twenty-First Century Fox, Inc. (FOXA) Seasonal Chart U.S. Auto Parts Network, Inc. (PRTS) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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