Contact | RSS Feed

Stock Market Outlook for September 5, 2018

Construction spending showing an average trend this year as strength in public spending offsets weakness in private non-residential.

 

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:

Myriad Genetics, Inc. (NASD:MYGN) Seasonal Chart

Myriad Genetics, Inc. (NASD:MYGN) Seasonal Chart

VSE Corp. (NASD:VSEC) Seasonal Chart

VSE Corp. (NASD:VSEC) Seasonal Chart

 

 

The Markets

Stocks started the month of September on a bit of a soft note as trade worries weighed on investor sentiment.  The S&P 500 Index shed just less than two-tenths of one percent, weighed down, oddly enough, by this summer’s winner: the health care sector.  The S&P 500 Health Care Sector Index declined by seven-tenths of a percent, pulling back towards a level of support around its 20-day moving average.  Momentum indicators are rolling over from overbought territory, triggering sell signals with respect to RSI and MACD.  The sector has significantly outperformed the broader market since the off-season for stocks began at the beginning of May, returning 14.37% in the past four months.  The sector remains in a period of seasonal strength through to the start of December.

image

Healthcare Sector Seasonal Chart

HEALTHCARE Relative to the S&P 500
HEALTHCARE Relative to the S&P 500

HEALTHCARE Monthly Averages

On the economic front, a report on construction spending in the US indicated that the growth in activity this year is inline with the seasonal average trend.  The headline print indicated that construction spending increased by 0.1% in July, short of the 0.4% increase that was forecast by analysts.  Stripping out the seasonal adjustments, total construction spending was up by 2.3%, which is better than the 1.5% increase that is average for the month.  Year-to-date, the change through the first seven months of the year is about inline with the seasonal norm, up by 25.6%.  Strength in public spending is offsetting a weak trend with respect to private non-residential activity, creating this rather average result.  On the public side, office, commercial, public safety, amusement/recreation, highway/street, waste disposal, and water supply are trending solidly above average, reflecting the strength in the broader economy.  The only two categories in the public, non-residential universe that are trending below average year-to-date is health care and power.  On the private, non-residential side, lodging, office, and religious are showing strength above seasonal average trends.  Overall, the trends, while somewhat segmented, continue to reiterate the strength in the economy and the investments being made by businesses as companies take advantage of the new tax code.  Seasonally, August typically marks the peak in construction activity for the year as projects are concluded ahead of the colder weather through the fall and winter.

Total Construction Spending  Seasonal Chart

Monthly Total Construction Spending  Data

Total Construction Spending Seasonal Chart

Private Construction Spending: Nonresidential  Seasonal Chart Private Construction Spending: Residential  Seasonal Chart Public Construction Spending Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.85.

image

 

Sectors and Industries entering their period of seasonal strength:

Oats Futures (O) Seasonal Chart
FUTURE_O1 Relative to the S&P 500FUTURE_O1 Relative to Gold

FUTURE_O1 Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

AeroVironment, Inc. (AVAV) Seasonal Chart Christopher & Banks Corporation (CBK) Seasonal Chart  Ctrip.com International, Ltd. (CTRP) Seasonal Chart    General Finance Corporation (GFN) Seasonal Chart Guidewire Software, Inc. (GWRE) Seasonal Chart HD Supply Holdings, Inc. (HDS) Seasonal Chart KNOT Offshore Partners LP (KNOP) Seasonal Chart      The Descartes Systems Group Inc. (DSGX) Seasonal Chart Vera Bradley, Inc. (VRA) Seasonal Chart Verint Systems Inc. (VRNT) Seasonal Chart 

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.