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Stock Market Outlook for May 9, 2019


Vehicle sales showing the weakest year-to-date change on record.

 

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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Dominion Energy, Inc. (NYSE:D) Seasonal Chart

Dominion Energy, Inc. (NYSE:D) Seasonal Chart

AGT Food and Ingredients Inc. (TSE:AGT.TO) Seasonal Chart

AGT Food and Ingredients Inc. (TSE:AGT.TO) Seasonal Chart

H & R Block, Inc. (NYSE:HRB) Seasonal Chart

H & R Block, Inc. (NYSE:HRB) Seasonal Chart

MGE Energy, Inc. (NASD:MGEE) Seasonal Chart

MGE Energy, Inc. (NASD:MGEE) Seasonal Chart

Absolute Software Corp. (TSE:ABT.TO) Seasonal Chart

Absolute Software Corp. (TSE:ABT.TO) Seasonal Chart

 

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I will be on BNN’s Market Call Tonight at 6:00pm ET this Friday, May 10th taking your calls on Technical Analysis and Seasonal Investing.  CALL TOLL-FREE 1-855-326-6266,  EMAIL marketcall@bnnbloomberg.ca,  or TWEET @MarketCall.

 

The Markets

Stocks closed marginally lower on Wednesday as investors continued to monitor headlines pertaining to trade negotiations between the US and China.  The S&P 500 Index shed just less than two-tenths of one percent, closing around the lows of the session following an intraday attempt to chart a gain for the day.  Utilities was the biggest sector laggard, falling by 1.38% according to the S&P 500 sector benchmark.  The index broke below variable support at its 50-day moving average, quickly falling towards horizontal support at 288.  A short-term double-top pattern projects a downside target towards the 200-day moving average at 278.  The sector peaked in the month of March and has been gradually rolling over, despite positive seasonal tendencies that suggest gains, on average, into the spring.  Seasonally, the next period of strength is in the back half of summer as the weather and the defensive characteristics of sector constituents make them an ideal hold during the third quarter volatility.

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Utilities Sector Seasonal Chart

On the economic front, a report on vehicle sales for April pours cold water on the prospect of robust consumer spending this spring.  The headline print of April’s US Vehicle Sales report indicates that activity fell by 5.7% to a seasonally adjusted annual rate of 16.933 million. Stripping out the seasonal adjustments, total vehicle sales for April actually fell by 16.9% to 1.373 million, representing the weakest tally for the month since 2013. The average decline for the fourth month of the year is 8.6%. The result for this spring month puts the year-to-date change 15.8% below the seasonal average trend, which is the weakest performance through the first four months of the year on record. Subscribe now and we’ll send you our full analysis pertaining to this significant component of consumer spending in the US.

Total Vehicle Sales Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.20.  As fear rises, investors are increasingly hedging up their books by way of the option market, which is pushing the ratio of puts to calls to the highest level since the beginning of January.  Previously we highlighted indications of complacency in the month of April, leading into this month’s pullback.  As the boat lists back towards a healthy balance of bulls and bears, opportunities are being created.  High put-call ratios, such as the level that we saw back in December, typically provide excellent risk to reward entry points.  While not necessarily a screaming buy yet, the complacency that was once embeded in the market just a few weeks ago is being cleared, refreshing the market for what could be another move higher.

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Seasonal charts of companies reporting earnings today:

ACI Worldwide, Inc. (ACIW) Seasonal Chart Air Lease Corporation (AL) Seasonal Chart Algonquin Power & Utilities Corp. (AQN) Seasonal Chart AMC Entertainment Holdings, Inc. (AMC) Seasonal Chart Ameren Corporation (AEE) Seasonal Chart ArcelorMittal (MT) Seasonal Chart Becton, Dickinson and Company (BDX) Seasonal Chart Blue Bird Corporation (BLBD) Seasonal Chart Callaway Golf Company (ELY) Seasonal Chart Canadian Natural Resources Limited (CNQ) Seasonal Chart Capital Senior Living Corporation (CSU) Seasonal Chart CenterPoint Energy, Inc. (CNP) Seasonal Chart China Automotive Systems, Inc. (CAAS) Seasonal Chart Choice Hotels International, Inc. (CHH) Seasonal Chart Comstock Resources, Inc. (CRK) Seasonal Chart Crescent Point Energy Corporation (CPG) Seasonal Chart Duke Energy Corporation (DUK) Seasonal Chart Endo International plc (ENDP) Seasonal Chart Equifax, Inc. (EFX) Seasonal Chart First Majestic Silver Corp. (AG) Seasonal Chart General Finance Corporation (GFN) Seasonal Chart Magna International, Inc. (MGA) Seasonal Chart Norwegian Cruise Line Holdings Ltd. (NCLH) Seasonal Chart Revlon, Inc. (REV) Seasonal Chart Ritchie Bros. Auctioneers Incorporated (RBA) Seasonal Chart Symantec Corporation (SYMC) Seasonal Chart Tapestry, Inc. (TPR) Seasonal Chart TELUS Corporation (TU) Seasonal Chart The Hain Celestial Group, Inc. (HAIN) Seasonal Chart U S Concrete, Inc. (USCR) Seasonal Chart U.S. Auto Parts Network, Inc. (PRTS) Seasonal Chart VALE S.A. (VALE) Seasonal Chart Westport Fuel Systems Inc (WPRT) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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