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Stock Market Outlook for April 11, 2019


S&P Technology Sector Index breaking out, charting a new record high.

 

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:

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Lockheed Martin Corp. (NYSE:LMT) Seasonal Chart

Lockheed Martin Corp. (NYSE:LMT) Seasonal Chart

ANSYS, Inc. (NASD:ANSS) Seasonal Chart

ANSYS, Inc. (NASD:ANSS) Seasonal Chart

Portola Pharmaceuticals Inc. (NASD:PTLA) Seasonal Chart

Portola Pharmaceuticals Inc. (NASD:PTLA) Seasonal Chart

Alaska Communications Systems Group, Inc. (NASD:ALSK) Seasonal Chart

Alaska Communications Systems Group, Inc. (NASD:ALSK) Seasonal Chart

 

 

The Markets

Stocks clawed their way higher on Wednesday as investors digested minutes from the recent FOMC meeting and reports on consumer prices and petroleum inventories.  The S&P 500 Index gained around a third of one percent led by technology and REITs as a battle between offensive and defensive bets plays out.  The S&P 500 Technology Sector Index charted a new record high, surpassing the previous peak charted in October of last year.  The sector has been strongly outperforming the broader market since the start of January as investors re-adopt the momentum trade.  Given the weight of the sector in many market benchmarks, the strength of this segment is important for the broader health of the equity market.  Underperformance  through the third quarter of last year provided early indication that investors were shedding risk and rotating away from the momentum stocks that carried the market higher in the first place; stocks subsequently melted down through the fourth quarter.  New multi-year highs on the absolute and relative trend suggests a favourable backdrop for stocks overall, at least for the time being.  Seasonally, the next period of strength for the sector begins around this time of year, running through the middle of July, encompassing the developer conferences that take place in the late spring.

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http://charts.equityclock.com/seasonal_charts/TECHNOLOGY_RelativeToSPX.PNG

On schedule for the Wednesday session, the Energy Information Administration (EIA) released the status of petroleum inventories in the US. The EIA indicated that crude oil inventories jumped sharply by 7.0 million barrels in the week ending April 5th, while gasoline inventories were lower by 7.7 million barrels. The result places the days of supply of oil higher by four-tenths to 28.5 while gasoline saw a decline of more than a full day to 24.5. The average days of supply for oil and gas at the beginning of April is 23.7 and 25.1, respectively.  As part of our intraday distributions, subscribers received further insight on the state of petroleum inventories in the US and how it relates to stocks in the energy sector.

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Weekly U.S. Days of Supply of Total Gasoline  (Number of Days) Seasonal Chart

On the economic front, the US Consumer Price Index (CPI) for March was released before the opening bell. The headline print indicated that CPI increased by 0.4% in March, slightly exceeding the consensus analyst estimate that called for an increase of 0.3%. The year-over-year change ticked higher from 1.5% to 1.9%, bordering on the Fed’s two percent target. Stripping out the seasonal adjustments, the Consumer Price Index for All Urban Consumers actually increased by 0.6% in the third month of the year, which is marginally stronger than the 0.5% increase that is average for this period. The year-to-date change is now higher by 1.2%, now just a mere tenth of a percent below the seasonal average trend.  Subscribers received further analysis on consumer prices in the US and how they may be impacted by the ongoing tariff war.

Consumer Price Index for All Urban Consumers: All Items Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.89.

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Seasonal charts of companies reporting earnings today:

Apogee Enterprises, Inc. (APOG) Seasonal Chart Commerce Bancshares, Inc. (CBSH) Seasonal Chart Fastenal Company (FAST) Seasonal Chart Rite Aid Corporation (RAD) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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