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Stock Market Outlook for June 17, 2019


S&P 500 Index charts a doji (indecision) candlestick for the week as it heads into the FOMC and Quad Witching week.

 

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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Gold Fields Ltd. (NYSE:GFI) Seasonal Chart

Gold Fields Ltd. (NYSE:GFI) Seasonal Chart

LendingTree, Inc. (NASD:TREE) Seasonal Chart

LendingTree, Inc. (NASD:TREE) Seasonal Chart

Century BanCorp, Inc. (NASD:CNBKA) Seasonal Chart

Century BanCorp, Inc. (NASD:CNBKA) Seasonal Chart

Astronics Corp. (NASD:ATRO) Seasonal Chart

Astronics Corp. (NASD:ATRO) Seasonal Chart

The Becker Milk Co. Ltd.  (TSE:BEK/B.TO) Seasonal Chart

The Becker Milk Co. Ltd. (TSE:BEK/B.TO) Seasonal Chart

Euronet Services, Inc. (NASD:EEFT) Seasonal Chart

Euronet Services, Inc. (NASD:EEFT) Seasonal Chart

Southern Missouri Bancorp, Inc. (NASD:SMBC) Seasonal Chart

Southern Missouri Bancorp, Inc. (NASD:SMBC) Seasonal Chart

China Telecom Corp. (NYSE:CHA) Seasonal Chart

China Telecom Corp. (NYSE:CHA) Seasonal Chart

TC PipeLines Partners LP (NYSE:TCP) Seasonal Chart

TC PipeLines Partners LP (NYSE:TCP) Seasonal Chart

 

 

The Markets

Stocks closed mixed on Friday as technology stocks came under pressure following a disappointing earnings report from Broadcom.  The S&P 500 Index dipped by just less than two-tenths of one percent, continuing to maintain support at its 50-day moving average.  For the week, the large-cap benchmark was marginally higher, adding just less than half of one percent, charting a doji, indecision, candlestick.  Momentum indicators on the weekly look are fairly neutral with stochastics and RSI hovering very close to 50 and MACD just below its signal line.  The market is clearly waiting for a catalyst, of which next week there are a couple.  The FOMC meets on Tuesday and Wednesday, an event that will be intensely scrutinized by investors that are expecting at least one rate cut this year.  As well, Friday is Quad Witching day, presenting the last chance for investors to settle open stock option and futures contracts before they expire.  Volumes are typically higher during this event and it is not uncommon for the session to act as a pivot point to the short-term trend of stocks.  On average, stocks dip following this mid-June event, finding a low closer to the end of the month/quarter, at which point the average summer rally period begins.  This June swoon has more to do with mean reversion than anything, whereby those sectors that investors are overweight following strong performance in the quarter will be trimmed in favour of those areas that have underperformed, thereby rebalancing the books of portfolio managers.  Look for this activity as we move into the end of the quarter.

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On the economic front, a report on US retail trade was released before Friday’s opening bell.  The headline print for May’s report indicated that US retail sales increased by 0.5% last month, which is actually a miss versus the consensus estimate that called for a 0.7% rise. The control group, however, beat expectations by a tenth of a percent, showing a similar gain of 0.5%. Stripping out the seasonal adjustments, total retail trade actually increased by 7.6% in this fifth month of the year, which is firmly better than the 6.1% increase that is average for the spring month. The year-to-date change is now trending 5.4% above average, remaining on the best pace through the first five months of the year on record.  Subscribe now and we’ll send you our full analysis of this important gauge of consumer spending.

Retail Trade: Total Seasonal Chart

Elsewhere in the economy, the report on industrial production was a little less upbeat. The headline print of May’s Industrial Production report indicates that activity increased by 0.4% last month, beating the consensus analyst estimate that called for a gain of 0.2%. The manufacturing component was inline with estimates, higher by 0.2% for this spring month. Stripping out the seasonal adjustments, total industrial production in the US was actually higher by 0.6% in May, which is slightly weaker than the 0.7% increase that is average for the spring month. The result places the year-to-date change 1.6% below the seasonal average trend, which is the weakest pace since 2015.  We sent out further analysis to subscribers intraday.  Subscribe now.

Industrial Production: Total Seasonal Chart

Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.97.

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Seasonal charts of companies reporting earnings today:

Fang Holdings Limited (SFUN) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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