Contact | RSS Feed

Stock Market Outlook for February 22, 2019


Utilities sector charts an all-time high as economic data suggests caution.

 

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:

ATS Automation Tooling Systems, Inc. (TSE:ATA.to) Seasonal Chart

ATS Automation Tooling Systems, Inc. (TSE:ATA.to) Seasonal Chart

Telephone & Data Systems, Inc. (NYSE:TDJ) Seasonal Chart

Telephone & Data Systems, Inc. (NYSE:TDJ) Seasonal Chart

McCoy Bros., Inc.  (TSE:MCB.TO) Seasonal Chart

McCoy Bros., Inc. (TSE:MCB.TO) Seasonal Chart

Tile Shop Holdings, Inc. (NASD:TTS) Seasonal Chart

Tile Shop Holdings, Inc. (NASD:TTS) Seasonal Chart

Forward Air Corp. (NASD:FWRD) Seasonal Chart

Forward Air Corp. (NASD:FWRD) Seasonal Chart

Cato Corp. (NYSE:CATO) Seasonal Chart

Cato Corp. (NYSE:CATO) Seasonal Chart

Conn's, Inc. (NASD:CONN) Seasonal Chart

Conn’s, Inc. (NASD:CONN) Seasonal Chart

Chart Industries Inc. (NASD:GTLS) Seasonal Chart

Chart Industries Inc. (NASD:GTLS) Seasonal Chart

 

New Payment Option for Equity Clock Subscriptions

We’ve received a number of comments over the past few months regarding user difficulty subscribing to our service using Paypal.  We have been working hard to find a solution that will assure security and provide ease of use.  Now you can pay directly via your credit card and gain access to all of the valuable information that the Seasonal Chart Database provides in mere seconds.  Simply navigate to the subscription page at https://charts.equityclock.com/subscribe and click the Blue “Subscribe” button of the subscription option that you desire.  A popup that links directly to the payment processor will appear, requesting your email and card information.  That’s it! Once submitted, you will gain instant access and be included on our daily and monthly distributions that highlight everything you should be looking out for from a seasonal perspective. 

 

The Markets

Stocks drifted lower on Thursday following disappointing reports on the economy that raised concerns pertaining to a pending recession.  The S&P 500 Index shed around a third of a percent, trading down to a minor open gap charted one week ago around 2760.  Of course, resistance at 2800 is directly overhead and investors are likely seeking a catalyst to fuel a move above that hurdle.  Whether the outcome from the China-US trade negotiations prove to be that fuel has yet to be seen, but a significant rejection from this zone on a downside catalyst could spell significant trouble for stocks as the intermediate trend of lower-lows and lower-highs would remain intact.

image

Looking at the market internals on Thursday, initial glance suggests a risk-off day.  Utilities, staples, and REITs, the defensive areas of the market, each closed firmly higher.  The Utilities sector ETF gained around three-quarters of one percent to close at a new all-time high in a market that is still struggling to regain its previous peak.  Defensive stocks continue to hold at or near 52-week highs, which is telling of the sentiment of investors in this uncertain market.  But while these risk-off areas traded higher, other defensive bets did not fare as well.  Bond prices were firmly lower on the day, as was the price of gold.  Meanwhile, transportation stocks bucked the negative market return, continuing a trend of outperformance that has been apparent since the start of the year.  While outperformance in the cyclical bet is typical for this time of year, the strength in defensive sectors is not.  Investors are selectively expressing caution, choosing to remain invested in equities, perhaps on the prospect of an upside surprise presented by a trade resolution, while managing portfolio beta in the event that a downside shock is realized.

image

Utilities Sector Seasonal Chart

On the economic front, reports released on Thursday morning provided a bit of a mixed view pertaining to the strength of the US manufacturing economy. The headline print of December’s Durable Goods report indicates that new orders increased by 1.2%, which was better than the 1.0% increase forecasted by analysts. However, what captured attention was core capital goods, which declined by 0.7%, a miss versus estimates of an unchanged result. Stripping out the seasonal adjustments, the Value of Manufacturers’ New Orders for Durable Goods Industries actually increased by 4.8% in December, which is far less than the 8.9% average increase for the last month of the year. The calendar year change showed performance that was 1.6% above average, marking the second year in a row for growth in this component of manufacturing activity.  We provided further insight on this report to subscriber via a report delivered directly to their inbox.  Subscribe now and receive this and other relevant reports that provide context as to how fundamental influences in the economy impact seasonal trades in the market.

Value of Manufacturers' New Orders for Durable Goods Industries Seasonal Chart

Monthly Value of Manufacturers' New Orders for Durable Goods Industries Data

Providing a downbeat indication of what to expect ahead for the manufacturing economy, the Philadelphia Fed Business Outlook survey reported a significant miss for the month of February.  The headline print indicated that the General Business Conditions Index fell from +17.0 in January to –4.1 this month.  This is the first result pointing to contracting conditions since early 2016 when the manufacturing economy was in a recession.  Stripping out the seasonal adjustments, the actual level of the business conditions index was 0, which is well below the +8.5 level that is average for the second month of the year.  The first below average print since the manufacturing recession of 2015/2016 was observed in August of last year as tariffs started to take a toll.  The index quickly rebounded in the months following, suggesting that the late summer read was an anomaly.  While this print might similarly prove to be a one-off, the move below the seasonal average trend this time is much more severe, hinting of something more detrimental.  Seasonally, the sentiment indicator of manufacturing conditions typically rises through the first quarter, reaching a peak in March as manufacturing activity ramps-up into the spring.

Philadelphia Manufacturing Business Outlook Survey Seasonal Chart

Another weak housing report once again has analysts debating the strength of this segment of the economy. The headline print of January’s existing homes sales report indicated that activity fell by 1.2% to a seasonally adjusted annual rate of 4.94 million. Analysts were expecting a gain of 0.8% to a rate of 5.04 million. Stripping out the seasonal adjustments, the sales of existing homes actually fell by 24.4% versus the month prior, which is better than the 27.4% decline that is average for this winter month. The result follows the worst calendar year change since 2007, down by 11.7% in 2018.  Further analysis was sent out to subscribers intraday providing investment implications.  Signup now to be included on future distributions.

Existing Home Sales Seasonal Chart

Monthly Existing Home Sales Data

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.93.

image

 

 

 

Seasonal charts of companies reporting earnings today:

AutoNation, Inc. (AN) Seasonal Chart Barnes Group, Inc. (B) Seasonal Chart  Cabot Oil & Gas Corporation (COG) Seasonal Chart Cinemark Holdings Inc (CNK) Seasonal Chart Cott Corporation (COT) Seasonal Chart Enerplus Corporation (ERF) Seasonal Chart Entercom Communications Corp. (ETM) Seasonal Chart HMS Holdings Corp (HMSY) Seasonal Chart Insmed, Inc. (INSM) Seasonal Chart ITT Inc. (ITT) Seasonal Chart Magna International, Inc. (MGA) Seasonal Chart Momenta Pharmaceuticals, Inc. (MNTA) Seasonal Chart New Senior Investment Group Inc. (SNR) Seasonal Chart  Pinnacle West Capital Corporation (PNW) Seasonal Chart R1 RCM Inc. (RCM) Seasonal Chart Royal Bank Of Canada (RY) Seasonal Chart Ruth's Hospitality Group, Inc. (RUTH) Seasonal Chart Telephone and Data Systems, Inc. (TDS) Seasonal Chart Travelport Worldwide Limited (TVPT) Seasonal Chart United States Cellular Corporation (USM) Seasonal Chart W.P. Carey Inc. (WPC) Seasonal Chart Wayfair Inc. (W) Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.