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Stock Market Outlook for September 18, 2019


Another case of the seasonally adjusted data saying one thing and the actual, unadjusted data saying the opposite: Canada Manufacturing Sales were actually much stronger than average in July, but the headlines suggest weakness.

 

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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FedEx Corp. (NYSE:FDX) Seasonal Chart

FedEx Corp. (NYSE:FDX) Seasonal Chart

Loral Space & Communications, Inc. (NASD:LORL) Seasonal Chart

Loral Space & Communications, Inc. (NASD:LORL) Seasonal Chart

Territorial Bancorp Inc. (NASD:TBNK) Seasonal Chart

Territorial Bancorp Inc. (NASD:TBNK) Seasonal Chart

Lannett Co., Inc. (NYSE:LCI) Seasonal Chart

Lannett Co., Inc. (NYSE:LCI) Seasonal Chart

Steel Partners Holdings LP (NYSE:SPLP) Seasonal Chart

Steel Partners Holdings LP (NYSE:SPLP) Seasonal Chart

 

 

The Markets

Stocks closed generally higher on Tuesday as investors rotated back towards defensive bets, including technology.  The S&P 500 Index added just over a quarter of one percent, reclaiming the psychologically important 3000 level.  Consumer staples, utilities, and REITs topped the leaderboard, hinting of caution ahead of the FOMC announcement rate announcement on Wednesday.  Investors may also be reacting to the spike in the overnight lending rate that forced the Fed to interject to bring the cost of borrowing back within its benchmark range.  For now, the issue seems to be contained, but further monitoring is warranted.  Details of how the Fed may support the benchmark rate may be provided on Wednesday when the Fed releases their monetary policy statement.  Support on the large-cap benchmark continues to be implied around the 50-day moving average, a level that warrants a bullish bias as long it holds as support.

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On the economic front, a report on US industrial production for August was released before Tuesday’s opening bell.  The headline print indicated that activity expanded by 0.6% in the month, which is much stronger than the 0.2% increase that is average for this time of year. The manufacturing component, meanwhile, was higher by 0.5%, ahead of the 0.1% estimate. Stripping out the seasonal adjustments, Total Industrial Production actually increased by 2.8% in August, which is below the 3.1% increase that is average for the month. The year-to-date change is now running 1.4% below the seasonal average trend, which is the weakest pace since the manufacturing recession of 2015.  We sent out further details to subscribers.  Subscribe now!

Industrial Production: Total Seasonal Chart

North of the border, Statscan reports that manufacturing sales fell by 1.3% in July, which is significantly weaker than the 0.5% decline that was forecasted by analysts. The result places the year-over-year change at -1.9%. Stripping out the seasonal adjustments, the perspective changes. Manufacturing sales in this country actually fell by 6.0% in July, which is much stronger than the 10.6% decline that is average for this time of year. The result helps to pull the year-to-date change back into an above average position for the year, higher by 6.0%. The average change through the end of July is +0.7%.  Signup now and we’ll send you our report.

Sales of goods manufactured (shipments) Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.83.

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Seasonal charts of companies reporting earnings today:

General Mills, Inc. Seasonal Chart Herman Miller, Inc. Seasonal Chart S&W Seed Company Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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