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Stock Market Outlook for August 8, 2019


Stocks attempting to make a stand as the parabolic rise in treasury prices shows signs of exhaustion.

 

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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J&J Snack Foods Corp. (NASD:JJSF) Seasonal Chart

J&J Snack Foods Corp. (NASD:JJSF) Seasonal Chart

Manhattan Associates, Inc. (NASD:MANH) Seasonal Chart

Manhattan Associates, Inc. (NASD:MANH) Seasonal Chart

LyondellBasell Industries NV (NYSE:LYB) Seasonal Chart

LyondellBasell Industries NV (NYSE:LYB) Seasonal Chart

Tyler Technologies, Inc. (NYSE:TYL) Seasonal Chart

Tyler Technologies, Inc. (NYSE:TYL) Seasonal Chart

 

 

The Markets

Stocks rebounded on Wednesday, recovering from a sharp early session decline that saw major benchmarks fall back to Monday’s low.  For the Dow Jones Industrial Average, that level was around the 200-day moving average, a pivotal point in the long-term trend of the blue chip benchmark.  Investors are attempting to make a stand around these levels of long-term support, hoping to benefit from a rebound attempt to follow.  The S&P 500 Index gained just less than a tenth of a percent, closing a gap that was opened in the first hour of trade.  The next gap can be found between 2900 and 2920, a hurdle that may cap the short term bounce.  Hourly momentum indicators are attempting to rebound from deeply oversold levels, which have exhausted downside pressures in the near-term.

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The rebound during the session was led by consumer staples, REITs, and utilities, three defensive segments of the market that reinforces the pessimistic sentiment of investors.  Financials were the laggard as yields tested the lowest levels since 2016.  The yield on the 30-year treasury bond fell to a low of 2.12%, just off of the multi-decade low of 2.10% charted in 2016.  Despite the apparent consensus that yields would move definitively higher amidst the Fed’s tightening cycle and the comparatively less attractiveness versus that of equities, the longer-term trajectory of yields remains that of lower-lows and lower-highs.  Major moving averages are leaning in this manner, keeping the long-term bull market in bonds that began over three decades ago alive.  The move in treasury bond ETFs has arguably been parabolic since the lows set in the fourth quarter of last year, suggesting that the trend is unsustainable over the short-term.  The reversal of bond prices through Wednesday’s session suggests investor hesitation holding this asset at these lofty levels.  Seasonally, bond prices rise through the third quarter as volatility in equity markets forces investors to hedge portfolios; August has historically been the strongest month of the year for the fixed income asset class.

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30 Year U.S. Treasury Bonds Futures (US) Seasonality

On schedule for the Wednesday session, the Energy Information Administration released petroleum inventory data for the week just past.  The EIA indicated that oil stockpiles expanded by 2.4 million barrels in the week ending August 2nd, while gasoline inventories increased by 4.4 million barrels. The result kept the days of supply of oil unchanged at 25.4, while gasoline saw its days of supply rise by half of a day to 24.7. The average level for each at the start of August is 21.9 and 23.7, respectively.  We broke it all down for subscribers in a report released intraday.  Subscribe now and we’ll send you our analysis as it pertains to energy commodities.

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

To be released:  We have prepared a special report for subscribers that suggests the trajectory of the economy may have shifted in June.  Subscribe now to receive this important insight of economic activity, an important determination of the strength of risk assets.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.26.  Pessimistic extremes, such as this, are typically conducive to tradable lows in stocks.

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Seasonal charts of companies reporting earnings today:

ACI Worldwide, Inc. (ACIW) Seasonal Chart Activision Blizzard, Inc (ATVI) Seasonal Chart Air Lease Corporation (AL) Seasonal Chart Algonquin Power & Utilities Corp. (AQN) Seasonal Chart Allscripts Healthcare Solutions, Inc. (MDRX) Seasonal Chart AMC Entertainment Holdings, Inc. (AMC) Seasonal Chart Callaway Golf Company (ELY) Seasonal Chart Cardinal Health, Inc. (CAH) Seasonal Chart CBS Corporation (CBS) Seasonal Chart Chesapeake Utilities Corporation (CPK) Seasonal Chart Cincinnati Bell Inc (CBB) Seasonal Chart Cott Corporation (COT) Seasonal Chart EMC Insurance Group Inc. (EMCI) Seasonal Chart EPAM Systems, Inc. (EPAM) Seasonal Chart Hudbay Minerals Inc. (HBM) Seasonal Chart Keurig Dr Pepper Inc. (KDP) Seasonal Chart Magna International, Inc. (MGA) Seasonal Chart Motorcar Parts of America, Inc. (MPAA) Seasonal Chart Murphy Oil Corporation (MUR) Seasonal Chart News Corporation (NWSA) Seasonal Chart Norwegian Cruise Line Holdings Ltd. (NCLH) Seasonal Chart Perrigo Company (PRGO) Seasonal Chart Ritchie Bros. Auctioneers Incorporated (RBA) Seasonal Chart Silvercorp Metals Inc. (SVM) Seasonal Chart Symantec Corporation (SYMC) Seasonal Chart Synaptics Incorporated (SYNA) Seasonal Chart Tetra Technologies, Inc. (TTI) Seasonal Chart The Kraft Heinz Company (KHC) Seasonal Chart U.S. Auto Parts Network, Inc. (PRTS) Seasonal Chart Universal Technical Institute Inc (UTI) Seasonal Chart Viacom Inc. (VIAB) Seasonal Chart Westport Fuel Systems Inc (WPRT) Seasonal Chart Wheaton Precious Metals Corp. (WPM) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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