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Stock Market Outlook for February 11, 2019


Major equity benchmarks close just below their 50-week moving averages as signs of indecision become apparent.

 

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:

Statoil ASA (NYSE:STO) Seasonal Chart

Statoil ASA (NYSE:STO) Seasonal Chart

Iridium Communications Inc. (NASD:IRDM) Seasonal Chart

Iridium Communications Inc. (NASD:IRDM) Seasonal Chart

Anheuser-Busch InBev ADR (NYSE:BUD) Seasonal Chart

Anheuser-Busch InBev ADR (NYSE:BUD) Seasonal Chart

Stoneridge, Inc. (NYSE:SRI) Seasonal Chart

Stoneridge, Inc. (NYSE:SRI) Seasonal Chart

Fiserv, Inc. (NASD:FISV) Seasonal Chart

Fiserv, Inc. (NASD:FISV) Seasonal Chart

Caterpillar, Inc. (NYSE:CAT) Seasonal Chart

Caterpillar, Inc. (NYSE:CAT) Seasonal Chart

TETRA Technologies (NYSE:TTI) Seasonal Chart

TETRA Technologies (NYSE:TTI) Seasonal Chart

GEO Group, Inc. (NYSE:GEO) Seasonal Chart

GEO Group, Inc. (NYSE:GEO) Seasonal Chart

Teekay Corp. (NYSE:TK) Seasonal Chart

Teekay Corp. (NYSE:TK) Seasonal Chart

Surge Energy Inc. (TSE:SGY.TO) Seasonal Chart

Surge Energy Inc. (TSE:SGY.TO) Seasonal Chart

 

 

The Markets

Friday saw a muted session for stocks as investors continue to speculate on the outcome of trade negotiations between the US and China.  The S&P 500 Index closed higher by just less than a tenth of one percent, led by a mix of defensive (staples and utilities) and growth (technology and communication services) sectors.  For the week, the 0.05% gain on the large-cap benchmark charts a doji candlestick directly beneath a significant point of resistance at the 50-week moving average.  This indication of indecision suggests investor reluctance to push stocks higher with a major technical hurdle overhead and overhanging headline risks pertaining to global growth, trade, the government shutdown, and the subsequent debt ceiling deadline. Seasonally, the back half of February tends to see weak results for US equity benchmarks now that the bulk of earnings season has now past.  Through the first 16 calendar days of February, the S&P 500 Index has gained an average of 0.53% with 60% of periods showing positive results, while the rest of the month has averaged a loss of 0.35% with only 46% of periods ending higher.

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Turning north of the border, the Canadian benchmark is testing a similar juncture.  The TSX Composite ended at its 50-week moving average as of the close on Friday, hinting of similar indecision amongst investors following the substantial seven week rally from the December low.  Momentum indicators on this weekly look continue to trend lower, an indication of a lack of buying demand.  The Canadian index has outperformed US counterparts since the start of December, following its average seasonal pattern that sees positive relative performance into the end of February.  Perhaps no coincidence, this timeframe is inline with the run-up to the RRSP contribution deadline at the end of the second month of the year.  This flow of funds tends to wane following this date, leading to the outperformance of American benchmarks leading into the IRA contribution deadline in the middle of April.

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http://charts.equityclock.com/seasonal_charts/indexes/$TSX_RelativeToSPX.PNG

On the economic front, an abnormally strong Labour Force Survey out of Canada had investors scratching their heads. The headline print indicated that employment surged by 66,800 in January, far surpassing the consensus analyst estimate that called for a gain of only 5,000. Despite the significant increase, the unemployment rate ticked higher by two-tenths of a percent to 5.8%, the result of an increase in the participation rate. Stripping out the seasonal adjustments, employment actually declined by 198,500, or 1.1%, which is much better than the 1.6% decline that is average for the first month of the year. Full-time employment declined by 226,300, or 1.5%, and part-time employment was higher by 27,900, or 0.8%. The average change for each at this time of year is -1.8% and -0.4%, respectively. To receive the full analysis that we distributed on Friday, subscribe to Equity Clock at https://charts.equityclock.com/subscribe.

Canada Employment Seasonal Chart

Canada Employment full-time Seasonal Chart Canada Employment part-time Seasonal Chart

Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.04.

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Seasonal charts of companies reporting earnings today:

Bruker Corporation (BRKR) Seasonal Chart Chegg, Inc. (CHGG) Seasonal Chart Compass Minerals International, Inc. (CMP) Seasonal Chart DCP Midstream LP (DCP) Seasonal Chart Diamond Offshore Drilling, Inc. (DO) Seasonal Chart Everest Re Group, Ltd. (RE) Seasonal Chart Farmer Brothers Company (FARM) Seasonal Chart FMC Corporation (FMC) Seasonal Chart General Finance Corporation (GFN) Seasonal Chart Loews Corporation (L) Seasonal Chart Molina Healthcare Inc (MOH) Seasonal Chart Motorcar Parts of America, Inc. (MPAA) Seasonal Chart Radiant Logistics, Inc. (RLGT) Seasonal Chart Restaurant Brands International Inc. (QSR) Seasonal Chart Star Bulk Carriers Corp. (SBLK) Seasonal Chart Veeco Instruments Inc. (VECO) Seasonal Chart Vornado Realty Trust (VNO) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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