Contact | RSS Feed

Stock Market Outlook for November 12, 2018

S&P 500 Index pulling back to gap support, as well as the 200-day moving average, following early week gains.

 

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:

Weyerhaeuser Company  (NYSE:WY) Seasonal Chart

Weyerhaeuser Company (NYSE:WY) Seasonal Chart

Bob Evans Farms, Inc. (NASD:BOBE) Seasonal Chart

Bob Evans Farms, Inc. (NASD:BOBE) Seasonal Chart

Sotheby's  (NYSE:BID) Seasonal Chart

Sotheby’s (NYSE:BID) Seasonal Chart

Wabash National Corp. (NYSE:WNC) Seasonal Chart

Wabash National Corp. (NYSE:WNC) Seasonal Chart

Unisys Corp. (NYSE:UIS) Seasonal Chart

Unisys Corp. (NYSE:UIS) Seasonal Chart

Cohu, Inc. (NASD:COHU) Seasonal Chart

Cohu, Inc. (NASD:COHU) Seasonal Chart

Avery Dennison Corp. (NYSE:AVY) Seasonal Chart

Avery Dennison Corp. (NYSE:AVY) Seasonal Chart

The Goodyear Tire & Rubber Company  (NYSE:GT) Seasonal Chart

The Goodyear Tire & Rubber Company (NYSE:GT) Seasonal Chart

Helmerich & Payne Inc. (NYSE:HP) Seasonal Chart

Helmerich & Payne Inc. (NYSE:HP) Seasonal Chart

U.S. Global Investors, Inc. (NASD:GROW) Seasonal Chart

U.S. Global Investors, Inc. (NASD:GROW) Seasonal Chart

Silvercorp Metals, Inc. (AMEX:SVM) Seasonal Chart

Silvercorp Metals, Inc. (AMEX:SVM) Seasonal Chart

Cummins Inc.  (NYSE:CMI) Seasonal Chart

Cummins Inc. (NYSE:CMI) Seasonal Chart

 

 

The Markets

Stocks traded lower on Friday as investors continue to digest the strong early week returns.  The S&P 500 Index shed just over nine-tenths of one percent, testing its 200-day moving average at the lows of the session.  The benchmark closed well off of its low, suggesting support at  this longer-term hurdle.  The 200-day moving average also is within the center of the gap that was opened during Wednesday’s session between 2755 and 2775, a logical range for the benchmark to find support.  Resistance around the declining 50-day moving average at 2829 warrants monitoring.

image

For the week, the large-cap benchmark was higher by 2.13%, trading to as high as the 20-week moving average before peeling back into the end of the week.  Weekly momentum indicators are attempting to curl higher as the benchmark retraces the losses recorded in the month just past.  The negative momentum divergence with respect to RSI and MACD on this weekly look continues to present concern, although action would only be warranted if levels of resistance overhead prove to be too hard to overcome.  Seasonally, stocks tend to gyrate through the middle of November before taking another leg higher around the US Thanksgiving holiday in the US, which is now less than two weeks away.  While there is quite a bit in the market that is working according to seasonal norms, the underperformance of the technology sector, which tends to be one of the better performing segments of the market at this time of year, adds to concerns that we have regarding the equity performance going into the final weeks of the year.  Technology is the largest weight within most broad market benchmarks in the US, therefore its sluggish participation in the recent rebound attempt could pose a problem.  Consumer staples continues to chart new multi-month highs, emphasizing the defensive and cautious posture of investors following the election.

image

image

Technology Sector Seasonal Chart

TECHNOLOGY Relative to the S&P 500
TECHNOLOGY Relative to the S&P 500

TECHNOLOGY Monthly Averages

On the economic front, a report on producer prices indicated a rather abrupt rise in the month of October.  The headline print indicated that the Producer Price Index Final Demand increased by 0.6% in October, far surpassing the 0.2% consensus estimate.  Less the more volatile components of food and energy, the increase was still elevated at 0.5%, also firmly above the 0.2% forecasted increase.  Stripping out the seasonal adjustments, PPI Final Demand actually increased by 0.8%, which is the largest October increase in over eight years.  The average change in this metric for October is 0.2%.  PPI for all commodities is up by 0.5%, positively diverging from the seasonal norm that calls for a decline of 0.3%.  The result puts the year-to-date change for all commodities higher by 4.1%, which is the strongest performance since 2011.  The average change by this point in the year is 2.6%.  Parsing the categories, durable consumer goods, private capital equipment, services, and transportation are all showing gains this year that are well above average as strength in the manufacturing economy drives demand.  Overall, this was a hot report that will certainly not calm fears of a more aggressive Fed rate tightening cycle into the year ahead.  Seasonally, producer prices typically fall through the last quarter of the year, weighed down by the seasonal decline in the price of oil.

Producer Price Index for All Commodities Seasonal Chart

 Producer Price Index by Commodity for Final Demand: Finished Goods Seasonal Chart  Producer Price Index by Commodity for Final Demand: Finished Goods Less Foods and Energy Seasonal Chart

In other economic news, wholesale trade for September suggested a supply-demand mismatch.  Wholesale sales increased by 0.2%, while wholesale inventories increased by 0.4%, higher than the 0.3% increase that was expected.  Stripping out the seasonal adjustments, wholesale sales actually declined by 7.3%, while inventories increased by 1.5%.  The average change for each in the month of September is –1.0% and +1.0%, respectively.  The year-to-date change in sales is now firmly below average, while the change in inventories is well above the seasonal average trend.  Drilling down through the sales side, sharp declines in sales of motor vehicles, home furnishings, lumber, plumbing/heating equipment, drugs, and chemicals weighed on the aggregate result.  Each category is showing a year-to-date change that is well below average.  The significance of the weakness on the sales side leads to speculation that perhaps Hurricane Florence had an impact, which would suggest a snap-back in October and November should be expected.  It remains premature to speculate.  Should the abrupt declines prove not to be an anomaly, certainly significant warning flags for the broader economy would be raised.  Seasonally, inventories tend to rise into November, while sales gyrate back and forth through the end of the year.  For a breakdown of the results on the sales side, the charts can be accessed via the database at https://charts.equityclock.com/u-s-wholesale-trade-sales-and-inventories.

Wholesale Sales  Seasonal Chart

Monthly Wholesale Sales  Data

Wholesale Sales Seasonal Chart

Wholesale Inventories Seasonal Chart

Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.11.

image

 

 

 

Seasonal charts of companies reporting earnings today:

AECOM (ACM) Seasonal Chart Autohome Inc. (ATHM) Seasonal Chart  Cypress Energy Partners, L.P. (CELP) Seasonal Chart EnSync, Inc. (ESNC) Seasonal Chart   Mountain Province Diamonds Inc. (MPVD) Seasonal Chart Navigator Holdings Ltd. (NVGS) Seasonal Chart   Sigma Labs, Inc. (SGLB) Seasonal Chart Tidewater Inc. (TDW) Seasonal Chart UGI Corporation (UGI) Seasonal Chart 

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.