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Stock Market Outlook for November 7, 2018

The pace of Quits in America is trending below average, peculiar for a period of economic strength.

 

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:

Tredegar Corp. (NYSE:TG) Seasonal Chart

Tredegar Corp. (NYSE:TG) Seasonal Chart

Leon's Furniture Ltd. (TSE:LNF) Seasonal Chart

Leon’s Furniture Ltd. (TSE:LNF) Seasonal Chart

Superior Plus Corp. (TSE:SPB) Seasonal Chart

Superior Plus Corp. (TSE:SPB) Seasonal Chart

Abercrombie & Fitch Co. (NYSE:ANF) Seasonal Chart

Abercrombie & Fitch Co. (NYSE:ANF) Seasonal Chart

Unifirst Corp. (NYSE:UNF) Seasonal Chart

Unifirst Corp. (NYSE:UNF) Seasonal Chart

United Bancorp, Inc. (NASD:UBCP) Seasonal Chart

United Bancorp, Inc. (NASD:UBCP) Seasonal Chart

Capstead Mortgage Corp. (NYSE:CMO) Seasonal Chart

Capstead Mortgage Corp. (NYSE:CMO) Seasonal Chart

K-Bro Linen Inc. (TSE:KBL) Seasonal Chart

K-Bro Linen Inc. (TSE:KBL) Seasonal Chart

Farmer Brothers Co. (NASD:FARM) Seasonal Chart

Farmer Brothers Co. (NASD:FARM) Seasonal Chart

 

 

The Markets

Stocks posted solid gains on Tuesday as investors pared negative bets ahead of the mid-term election results.  The S&P 500 Index gained just over six-tenths of one percent to close just below the now declining 200-day moving average.  This is typical action ahead of an uncertain event as investors peg the benchmark against a neutral level represented by a major moving average.  It will be reaction in the days ahead that either defines the long-term average as a level of resistance or as a hurdle that would entice further buyers on a breakout.  Of course the tendencies following mid-terms are overwhelmingly positive, but it will be the technicals that will matter to investors into the end of the year.

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On the economic front, a report on Job Openings and Labor Turnover suggested slight weakness in the month of September.  The headline print indicated that job openings declined by 3.9% to 7.009 million.  This is the third month in a row that openings have been greater than seven million, a record high hurdle.  Stripping out the seasonal adjustments, openings actually declined by 4.6% in September, which is more than double the average decline for this time of year of 2.1%.  The year-to-date change now sits 17.3% above the seasonal average trend, continuing to show the best performance since 2011.  Mining, construction, manufacturing, wholesale trade, and professional/business services openings are showing gains this year that are well above average, benefiting from the strength in the broader economy.  Not benefiting, however, is retail trade, which is trending below the seasonal norm year-to-date.  As for hires, the year-to-date change is about inline with the seasonal norm, higher by 43% through the first three quarters.  The strength on this side of the labor market, according to this report, is being driven by mining, construction, retail, and financial activities. The overlap between openings and hires in the mining and construction industries highlights the demand for workers in these segments of the economy.  What is peculiar given the strength in the economy is the below average trend in quits.  Quits are running 2.1% below average through September, suggesting a lack of confidence in workers ability to find alternate employment.  Typically, quits will run 5% to 15% above average during boom times for the economy and then fall well below average during recessionary periods.  With a very low unemployment rate and an economy at full employment, its would be assumed that employees would have maximum mobility, allowing them to quit present positions and upgrade to better opportunities.  But this is not proving to be the case this time around.  Seasonally, the level of quits tends to fall off into the last quarter of the year as employees choose to sit-tight in present positions ahead of the end of year holidays. 

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

Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.12.  The ratio hit a high of 1.33 in the middle of the day as investors hedged portfolios ahead of the uncertain event.

 

 

 

 

Seasonal charts of companies reporting earnings today:

Abraxas Petroleum Corporation (AXAS) Seasonal Chart  Avid Technology, Inc. (AVID) Seasonal Chart Caesarstone Ltd. (CSTE) Seasonal Chart Century Casinos, Inc. (CNTY) Seasonal Chart CGI Group, Inc. (GIB) Seasonal Chart Charles River Laboratories International, Inc. (CRL) Seasonal Chart DaVita Inc. (DVA) Seasonal Chart Dean Foods Company (DF) Seasonal Chart Delphi Technologies PLC (DLPH) Seasonal Chart DISH Network Corporation (DISH) Seasonal Chart EMC Insurance Group Inc. (EMCI) Seasonal Chart Flowers Foods, Inc. (FLO) Seasonal Chart Flowserve Corporation (FLS) Seasonal Chart Fossil Group, Inc. (FOSL) Seasonal Chart FTD Companies, Inc. (FTD) Seasonal Chart Hawaiian Electric Industries, Inc. (HE) Seasonal Chart Hologic, Inc. (HOLX) Seasonal Chart Horizon Pharma plc (HZNP) Seasonal Chart Humana Inc. (HUM) Seasonal Chart IAC/InterActiveCorp (IAC) Seasonal Chart Just Energy Group, Inc. (JE) Seasonal Chart  Kinross Gold Corporation (KGC) Seasonal Chart Lannett Co Inc (LCI) Seasonal Chart Manulife Financial Corp (MFC) Seasonal Chart Marathon Oil Corporation (MRO) Seasonal Chart Marriot Vacations Worldwide Corporation (VAC) Seasonal Chart Michael Kors Holdings Limited (KORS) Seasonal Chart Microchip Technology Incorporated (MCHP) Seasonal Chart Monster Beverage Corporation (MNST) Seasonal Chart Murphy Oil Corporation (MUR) Seasonal Chart Newtek Business Services Corp. (NEWT) Seasonal Chart Office Depot, Inc. (ODP) Seasonal Chart Prudential Financial, Inc. (PRU) Seasonal Chart QUALCOMM Incorporated (QCOM) Seasonal Chart Rockwell Automation, Inc. (ROK) Seasonal Chart Scotts Miracle-Gro Company (The) (SMG) Seasonal Chart Sun Life Financial Inc. (SLF) Seasonal Chart Tetra Tech, Inc. (TTEK) Seasonal Chart The Stars Group Inc. (TSG) Seasonal Chart Twenty-First Century Fox, Inc. (FOXA) Seasonal Chart Wynn Resorts, Limited (WYNN) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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