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Stock Market Outlook for September 19, 2019


Treasury bond prices peak, on average, at this time of year.

 

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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Industrial-Alliance Life Insurance Co. (TSE:IAG.TO) Seasonal Chart

Industrial-Alliance Life Insurance Co. (TSE:IAG.TO) Seasonal Chart

PHX Energy Services Corp. (TSE:PHX.TO) Seasonal Chart

PHX Energy Services Corp. (TSE:PHX.TO) Seasonal Chart

Berry Plastics Group Inc. (NYSE:BERY) Seasonal Chart

Berry Plastics Group Inc. (NYSE:BERY) Seasonal Chart

Power Integrations, Inc. (NASD:POWI) Seasonal Chart

Power Integrations, Inc. (NASD:POWI) Seasonal Chart

Sierra Wireless, Inc. (NASD:SWIR) Seasonal Chart

Sierra Wireless, Inc. (NASD:SWIR) Seasonal Chart

Northfield Bancorp, Inc. (NASD:NFBK) Seasonal Chart

Northfield Bancorp, Inc. (NASD:NFBK) Seasonal Chart

 

 

The Markets

Stocks closed flat on Wednesday as investors digested the outcome of the two-day FOMC meeting.  The committee announced a cut in its benchmark rate by a quarter of one percent, marking the second such move since the effective federal funds rate peaked in the spring.  The fed announced that it is willing to support the continued expansion of the economy in the US amidst escalating geopolitical risks.  The S&P 500 Index closed just above the flat-line on the day, shaking off the almost one percent decline at the lows of the session.  Yet again, the benchmark managed to stay above the psychologically important 3,000 level on a closing basis.  The all-time high around 3025 remains a critical hurdle, while downside support remains at the 50-day moving average around 2950.

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A similar flat close was realized in the bond market as the bulls and the bears express their indecision over the FOMC event.  The 7 – 10 Year Treasury Bond ETF (IEF) closed just above the flat-line on the day.  The ETF broke below its 50-day moving average at the end of last week and has struggled over the last few sessions to get back above the intermediate hurdle.  Treasury bonds had moved higher in a parabolic manner into the end of August, suggesting that the trend was unsustainable and that a reversion back to the mean was likely.  Downside risks for a number of these treasury ETFs is back down to their 200-day moving averages, which, in the case of the intermediate treasury bond fund, is 4.5% below present levels.  Seasonally, treasury bonds tend to peak, on average, relative to equities around this time of year.

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10 Year U.S. Treasury Notes Futures (TY) Seasonality

On the economic front, a report on housing starts was released before Wednesday’s opening bell.  The headline print of August’s report indicated that activity increased by 12.2% last month to a seasonally adjusted annual rate of 1.364 million. Analysts were expecting an increase of 3.0% to a rate of 1.251 million. Stripping out the adjustments, starts actually increased by 4.8% in August, a positive divergence compared to the 4.6% decline that is average for this summer period. The result places the year-to-date change 26.6% above the seasonal average trend, which remains the best pace since 2012.  We sent out further analysis to subscribers, including a seasonal play that is on the horizon.  Signup now!

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

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.03.

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Seasonal charts of companies reporting earnings today:

Darden Restaurants, Inc. Seasonal Chart Steelcase Inc. Seasonal Chart Scholastic Corporation Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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