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Stock Market Outlook for February 5, 2019

S&P 500 Index closes above its 100-day moving average for the first time since early October as the rebound matures.

 

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:

Williams Cos., Inc. (NYSE:WMB) Seasonal Chart

Williams Cos., Inc. (NYSE:WMB) Seasonal Chart

Sonic Corp. (NASD:SONC) Seasonal Chart

Sonic Corp. (NASD:SONC) Seasonal Chart

ABB Ltd. (NYSE:ABB) Seasonal Chart

ABB Ltd. (NYSE:ABB) Seasonal Chart

WestRock Co. (NYSE:WRK) Seasonal Chart

WestRock Co. (NYSE:WRK) Seasonal Chart

Equity Residential Property Trust (NYSE:EQR) Seasonal Chart

Equity Residential Property Trust (NYSE:EQR) Seasonal Chart

HanesBrands, Inc. (NYSE:HBI) Seasonal Chart

HanesBrands, Inc. (NYSE:HBI) Seasonal Chart

VFCorp (NYSE:VFC) Seasonal Chart

VFCorp (NYSE:VFC) Seasonal Chart

Walker & Dunlop Inc. (NYSE:WD) Seasonal Chart

Walker & Dunlop Inc. (NYSE:WD) Seasonal Chart

 

 

The Markets

A tech led rally ahead of the release of earnings from Google fuelled further gains for equity benchmarks in the US on Monday.  The S&P 500 Index added just less than seven-tenths of one percent, inching above its 100-day moving average for the first time since early October.  The 200-day moving average at 2741.55 is the last major hurdle overhead as the rebound rally from the December lows reaches maturity.  At the start of January in our daily outlook we proposed a 28 to 30 day average rebound timeframe based on previous oversold conditions, such as what we saw back at the December low.  Tuesday marks session 28 since the December 24th low, suggesting that the timeframe of the present rally is inline with previous rebound attempts before the gains became exhausted.  Of course, history doesn’t always repeat, but it often rhymes.  At the beginning of January we suggested that the 30-day “rebound attempt may provide an ideal opportunity to trim equity exposure around levels of resistance.”  The market itself hasn’t provided definitive sell signals, but waning momentum suggests that they could be near.  In the Seasonal Advantage Portfolio that we manage with Castlemoore, we remain close to fully invested, having added significantly to equity exposure in the middle of December.  The value of the portfolio is back to all-time highs, thanks to prudent defensive actions in October and December, which made it easy to recoup the losses generated in the fourth quarter. To learn more about this portfolio that has outperformed the market since its inception, contact me through Castlemoore or email  seasonalportfolio@equityclock.com.

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On the economic front, the November report on US Factory Orders was finally released after being delayed the recent government shutdown. The headline print indicated that factory orders declined by 0.6%, which is weaker than the 0.2% increase that analysts were expecting. Stripping out the seasonal adjustments, the Value of Manufacturers’ New Orders for All Manufacturing Industries actually fell by 5.5% in November, which is weaker than the 4.3% decline that is average for the second to last month of the year. The year-to-date change now sits at +1.4%, which is above the seasonal average trend that calls for a 0.8% decline by this point in the year.  To receive further insight on the state of the manufacturing economy in the US, simply subscribe to our service and we’ll send you a report showing the trends in orders and shipments.

Value of Manufacturers' New Orders for All Manufacturing Industries Seasonal Chart

Monthly Value of Manufacturers' New Orders for All Manufacturing Industries Data

Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.84.

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Seasonal charts of companies reporting earnings today:

AGCO Corporation (AGCO) Seasonal Chart Allstate Corporation (The) (ALL) Seasonal Chart AmeriGas Partners, L.P. (APU) Seasonal Chart AMTEK, Inc. (AME) Seasonal Chart Anadarko Petroleum Corporation (APC) Seasonal Chart Archer-Daniels-Midland Company (ADM) Seasonal Chart Ashland Global Holdings Inc. (ASH) Seasonal Chart Badger Meter, Inc. (BMI) Seasonal Chart Becton, Dickinson and Company (BDX) Seasonal Chart BP p.l.c. (BP) Seasonal Chart Brooks Automation, Inc. (BRKS) Seasonal Chart Centene Corporation (CNC) Seasonal Chart Chubb Limited (CB) Seasonal Chart Church & Dwight Company, Inc. (CHD) Seasonal Chart Container Store (The) (TCS) Seasonal Chart Electronic Arts Inc. (EA) Seasonal Chart Emerson Electric Company (EMR) Seasonal Chart Estee Lauder Companies, Inc. (The) (EL) Seasonal Chart Gartner, Inc. (IT) Seasonal Chart Group 1 Automotive, Inc. (GPI) Seasonal Chart Hubbell Inc (HUBB) Seasonal Chart Lazard Ltd. (LAZ) Seasonal Chart Lennox International, Inc. (LII) Seasonal Chart Microchip Technology Incorporated (MCHP) Seasonal Chart MSG Networks Inc. (MSGN) Seasonal Chart Owens-Illinois, Inc. (OI) Seasonal Chart Plains All American Pipeline, L.P. (PAA) Seasonal Chart Ralph Lauren Corporation (RL) Seasonal Chart Skyworks Solutions, Inc. (SWKS) Seasonal Chart Suncor Energy Inc. (SU) Seasonal Chart Torchmark Corporation (TMK) Seasonal Chart Universal Technical Institute Inc (UTI) Seasonal Chart Unum Group (UNM) Seasonal Chart USANA Health Sciences, Inc. (USNA) Seasonal Chart Vertex Pharmaceuticals Incorporated (VRTX) Seasonal Chart Viacom Inc. (VIAB) Seasonal Chart Vishay Intertechnology, Inc. (VSH) Seasonal Chart Walt Disney Company (The) (DIS) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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