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Stock Market Outlook for November 1, 2018

S&P 500 Index has averaged a gain of 1.3% in November with 68% of periods showing a positive result.

 

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:

CRH, PLC (NYSE:CRH) Seasonal Chart

CRH, PLC (NYSE:CRH) Seasonal Chart

AMN Healthcare Services, Inc. (NYSE:AMN) Seasonal Chart

AMN Healthcare Services, Inc. (NYSE:AMN) Seasonal Chart

ArcelorMittal SA (NYSE:MT) Seasonal Chart

ArcelorMittal SA (NYSE:MT) Seasonal Chart

Winnebago Industries Inc. (NYSE:WGO) Seasonal Chart

Winnebago Industries Inc. (NYSE:WGO) Seasonal Chart

Eaton Corporation  (NYSE:ETN) Seasonal Chart

Eaton Corporation (NYSE:ETN) Seasonal Chart

 

 

The Markets

Stock attempted to pare the October’s losses on Wednesday as major benchmarks in the US closed higher for a second day.  The S&P 500 Index added 1.09%, taking the loss on the month down to 6.94%.  This is still the fourth weakest October in the past 50 years as the notoriously volatile month wreaked havoc on cyclical equities amidst a number of threats.  The large-cap benchmark triggered a monthly sell signal with respect to the Relative Strength Index (RSI), which continues to unwind the overbought move that started the year.  The index pulled back to its rising 20-month moving average, a level that buyers were enticed to enter in the past couple of sessions.  The 20-month average has provided support to the longer-term trend throughout the bull market runs since the end of the last recession and investors will want to see this level hold in order to mitigate the potential of longer-term weakness.

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Turning to the tendencies for stocks in the month of November, the month marks the start of the best six month trend for equities in most developed markets. The S&P 500 Index has gained an average of 1.3% in the month of November, representing the third best monthly performance of the year. Gains have been realized in 68% of Novembers over the past 50 years with returns ranging from a loss of 11.4% in November of 1973 to a gain of 10.2% in November of 1980. Gains have predominantly occurred around the start and the end of the month, the former seeing a boost from the tail end of earnings season, while the latter is the quiet period surrounding the Thanksgiving holiday in the US when portfolio managers refrain from any significant negative bets around the event.  The month tends to be led by the performance of cyclical sectors, most of which return over 2% in the period.  Utilities is the only sector to produce a negative result, declining by an average of 0.8% during the period.  Subscribers to the seasonal chart database were given a thorough analysis of each sector from a seasonal, fundamental, and technical perspective.  If you would like to receive a copy of our report, subscribe to either the monthly or yearly option via the following link: https://charts.equityclock.com/subscribe

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On schedule for the Wednesday session was the weekly petroleum status report.  The Energy Information Administration reported that oil stockpiles increased by 3.2 million barrels last week, while gasoline recorded a draw of the same  amount.  The result pushed the days of supply of oil to 26.1, back to around the highs of the year.  Domestic production of oil is back up to the high of the year, which is working to keep stockpiles elevated.  On the product side, while the days of supply of gasoline has come down, it is still well above average for this time of year.  At 24.6, the days of supply is the second highest for the end of October in over two decades.  Production is increasing well above average for this time of year, but the offsetting demand, as gauged by the change in the level of product supplied, has yet to match the supply injection.  As we have been suggesting for many weeks, all of this bodes bearish for energy commodities and prices are finally starting to reflect this bearish state after the price of oil hit the highs of the year at the start of October.

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 is trading below its rising trend channel that had supported the commodity throughout the past year.  Seasonally, oil remains in a period of weakness through to early December.

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Crude Oil Futures (CL) Seasonal Chart

FUTURE_CL1 Monthly Averages

In other economic news, Statscan released monthly GDP and Industrial Product Prices Indices for Canada.  We have uploaded the seasonal charts to the database, available via the following links:

Canada Monthly GDP – https://charts.equityclock.com/canada-monthly-gross-domestic-product-gdp-by-industry 

Canada Industrial Product Price Index (IPPI) – https://charts.equityclock.com/canada-industrial-product-price-index-ippi-by-north-american-product-classification-system-napcs

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.12.  This past couple of weeks have seen the longest consecutive stretch of daily bearish (put call ratio greater than 1) readings since the start of September 2015.  The bearish sentiment is consistent with intermediate lows within equity indices.

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Seasonal charts of companies reporting earnings today:

AAON, Inc. (AAON) Seasonal Chart Alleghany Corporation (Y) Seasonal Chart Allscripts Healthcare Solutions, Inc. (MDRX) Seasonal Chart Apple Inc. (AAPL) Seasonal Chart ArcelorMittal (MT) Seasonal Chart Avon Products, Inc. (AVP) Seasonal Chart Ball Corporation (BLL) Seasonal Chart BCE, Inc. (BCE) Seasonal Chart Bellatrix Exploration Ltd (BXE) Seasonal Chart California Water Service Group Holding (CWT) Seasonal Chart Canadian Natural Resources Limited (CNQ) Seasonal Chart Career Education Corporation (CECO) Seasonal Chart  CBS Corporation (CBS) Seasonal Chart Church & Dwight Company, Inc. (CHD) Seasonal Chart Cigna Corporation (CI) Seasonal Chart Consolidated Edison Inc (ED) Seasonal Chart Dominion Energy, Inc. (D) Seasonal Chart DowDuPont Inc. (DWDP) Seasonal Chart El Paso Electric Company (EE) Seasonal Chart Encana Corporation (ECA) Seasonal Chart EOG Resources, Inc. (EOG) Seasonal Chart Fluor Corporation (FLR) Seasonal Chart Gartner, Inc. (IT) Seasonal Chart Hanesbrands Inc. (HBI) Seasonal Chart Host Hotels & Resorts, Inc. (HST) Seasonal Chart Marathon Petroleum Corporation (MPC) Seasonal Chart Mednax, Inc (MD) Seasonal Chart MetLife, Inc. (MET) Seasonal Chart Oshkosh Corporation (OSK) Seasonal Chart Pembina Pipeline Corp. (PBA) Seasonal Chart PPL Corporation (PPL) Seasonal Chart Rogers Corporation (ROG) Seasonal Chart Royal Dutch Shell PLC (RDS.A) Seasonal Chart Sealed Air Corporation (SEE) Seasonal Chart  Starbucks Corporation (SBUX) Seasonal Chart Symantec Corporation (SYMC) Seasonal Chart Teva Pharmaceutical Industries Limited (TEVA) Seasonal Chart The Kraft Heinz Company (KHC) Seasonal Chart TransCanada Corporation (TRP) Seasonal Chart Treehouse Foods, Inc. (THS) Seasonal Chart U S Concrete, Inc. (USCR) Seasonal Chart United States Steel Corporation (X) Seasonal Chart Wayfair Inc. (W) Seasonal Chart  Zoetis Inc. (ZTS) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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