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Stock Market Outlook for May 17, 2019


German equity benchmark bouncing firmly from a convergence of support as investors turn their optimism over to Europe.

 

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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Park Electrochemical Corp. (NYSE:PKE) Seasonal Chart

Park Electrochemical Corp. (NYSE:PKE) Seasonal Chart

Jazz Pharmaceuticals, Inc. (NASD:JAZZ) Seasonal Chart

Jazz Pharmaceuticals, Inc. (NASD:JAZZ) Seasonal Chart

Insulet Corp. (NASD:PODD) Seasonal Chart

Insulet Corp. (NASD:PODD) Seasonal Chart

Alamos Gold Inc. (NYSE:AGI) Seasonal Chart

Alamos Gold Inc. (NYSE:AGI) Seasonal Chart

Premier Gold Mines Ltd. (TSE:PG.TO) Seasonal Chart

Premier Gold Mines Ltd. (TSE:PG.TO) Seasonal Chart

Seabridge Gold, Inc. (NYSE:SA) Seasonal Chart

Seabridge Gold, Inc. (NYSE:SA) Seasonal Chart

Power Corp. Of Canada (TSE:POW.TO) Seasonal Chart

Power Corp. Of Canada (TSE:POW.TO) Seasonal Chart

 

 

The Markets

Stocks closed higher on Thursday as investors continue to test the limits of the market in the midst of the ongoing trade war.  The S&P 500 Index added just less than nine-tenths of one percent, fuelled by strength in materials and financials.  The large-cap benchmark moved above its 50-day moving average to test resistance around the 20-day.  Momentum indicators are attempting to curl higher as investors look to add equity exposure in an effort to avoid being left out of another upleg in stocks following the strength through the first four months of the year.  But while investors are willing to bid the market higher intraday, the close over the past few sessions has suggested continued caution as investors assure that risk is constrained, not knowing what the next trade headline will bring.  The S&P 500 Index ended 19 points off of the high of the day.

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While markets in the US take another swing at all-time highs, strength is also returning to European benchmarks following the delay of auto tariffs by the US.  The DAX closed higher by 1.74% on Thursday, bouncing from horizontal and 50-day moving average support around 11,800.  The French CAC closed higher by 1.37%, closing above its 50-day moving average.  It appears that investors have shifted their optimism pertaining to trade negotiations away from China and towards Europe as the Trump administration strives for a win, of some sort.  A head-and-shoulders bottoming pattern on the chart of the German DAX projects an upside target of 12,900, or close to 5% above present levels.  Seasonally, the German benchmark tends to decline between the start of May and the middle of September amidst a general risk-off bias.

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DAX Index Seasonal Chart

$DAX Relative to the S&P 500
$DAX Relative to the S&P 500

$DAX Monthly Averages

On the economic front, a report on housing starts in the US was released before Thursday’s opening bell.  The report indicated that housing starts increased by 5.7% in April to a seasonally adjusted annual rate of 1.235 million. Analysts were expecting a pace of 1.200 million. Stripping out the seasonal adjustments, housing starts actually increased by 19.1% in April, which is double the average increase for this time of year of 8.9%. The result places the year-to-date change higher by 50.1%, which is the best start to a year since 2012. The average change through the first four months of the year is 34.0%, benefitting from the spring home building season.  Subscribers received further insight on the state of the housing market intraday.

http://charts.equityclock.com/seasonal_charts/economic_data/HOUSTNSA_seasonal_chart.PNG

Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.02.

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Seasonal charts of companies reporting earnings today:

CAE Inc (CAE) Seasonal Chart Deere & Company (DE) Seasonal Chart Dr. Reddy's Laboratories Ltd (RDY) Seasonal Chart 

 

 

S&P 500 Index

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TSE Composite

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