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Stock Market Outlook for June 27 2019


Typical end of quarter rebalancing sends defensive sectors lower.

 

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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Catalyst Biosciences Inc. (NASD:CBIO) Seasonal Chart

Catalyst Biosciences Inc. (NASD:CBIO) Seasonal Chart

Archer Daniels Midland Co. (NYSE:ADM) Seasonal Chart

Archer Daniels Midland Co. (NYSE:ADM) Seasonal Chart

Electronic Arts, Inc. (NASD:EA) Seasonal Chart

Electronic Arts, Inc. (NASD:EA) Seasonal Chart

Anixter Intl, Inc. (NYSE:AXE) Seasonal Chart

Anixter Intl, Inc. (NYSE:AXE) Seasonal Chart

 

 

The Markets

Stocks closed mildly lower on Wednesday as an unwind in defensive sectors offset gains in energy and technology.  The S&P 500 Index closed lower by just over a tenth of one percent, continuing to roll over from resistance at 2950.  Support below can be derived anywhere between 2873 and 2900.  The move follows sharp declines in consumer staples, utilities, and REITs in what looks to be a typical month-end and quarter-end rebalancing amongst portfolios; those areas that have outperformed through the quarter were sold off in favour of those areas that have lagged, thereby bringing allocations back inline with mandated targets.  This jockeying for position typically fades following the third last trading day of the period (Wednesday) given the trading day settlement requirements.  Thereafter, the average summer rally period begins, on average.

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On schedule for the Wednesday session, the Energy Information Administration (EIA) released petroleum inventories for the week just past.  The EIA indicates that oil inventories declined by 12.8 million barrels last week, which is the third largest weekly decline in history. The other two events that saw larger declines was the 14.5 million barrel decline in September of 2016 and the 14.9 million barrel decline in January of 1999. The result takes the days of supply of the commodity to 27.4, a full day less than the prior week’s result. The average level of days of supply for this time of year is 22.6.  We sent out further analysis on the state of the oil market to subscribers, including where we see fair value for the commodity given the intersection of supply and demand.  Subscribe now and we’ll send this report to you.

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

On the economic front, a report on durable goods was released before Wednesday’s opening bell.  The headline print indicated that new orders of durable goods declined by 1.3% in May, which is a notable miss versus expectations of a 0.1% decline. Stripping out the seasonal adjustments, the Value of Manufacturers’ New Orders for Durable Goods Industries actually declined by 0.2% in May, which is a negative divergence compared to the 2.9% increase that is average for the spring month. The year-to-date change has now fallen below the seasonal average trend by seven-tenths of one percent.  Subscribe now to receive the metrics behind this aggregate result.

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

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.91.

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Seasonal charts of companies reporting earnings today:

Accenture plc (ACN) Seasonal Chart Apogee Enterprises, Inc. (APOG) Seasonal Chart Avid Bioservices, Inc. (CDMO) Seasonal Chart CalAmp Corp. (CAMP) Seasonal Chart ConAgra Brands, Inc. (CAG) Seasonal Chart Franklin Covey Company (FC) Seasonal Chart McCormick & Company, Incorporated (MKC) Seasonal Chart Nike, Inc. (NKE) Seasonal Chart Patterson Companies, Inc. (PDCO) Seasonal Chart Peak Resorts, Inc. (SKIS) Seasonal Chart Progress Software Corporation (PRGS) Seasonal Chart Renesola Ltd. (SOL) Seasonal Chart Shaw Communications Inc. (SJR) Seasonal Chart Walgreens Boots Alliance, Inc. (WBA) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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