Stock Market Outlook for September 23, 2019
Retail Sales in Canada unchanged in July, stronger than the 1.3% decline that is average for the month.
*** 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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Seagate Technology Holdings, Inc. (NASD:STX) Seasonal Chart
SEI Investments Co. (NASD:SEIC) Seasonal Chart
Infosys Technologies Ltd. (NYSE:INFY) Seasonal Chart
Entravision Communications Corp. (NYSE:EVC) Seasonal Chart
Buckle, Inc. (NYSE:BKE) Seasonal Chart
Century Aluminum Co. (NASD:CENX) Seasonal Chart
Marten Transport, Ltd. (NASD:MRTN) Seasonal Chart
Zebra Technologies Corp. (NASD:ZBRA) Seasonal Chart
Viad Corp. (NYSE:VVI) Seasonal Chart
BroadVision, Inc. (NASD:BVSN) Seasonal Chart
Corelogic Inc. (NYSE:CLGX) Seasonal Chart
Sally Beauty Holdings Inc. (NYSE:SBH) Seasonal Chart
The Markets
Stocks closed in the red on Friday as headlines crossed that the Chinese trade delegation would be cutting their trip short and would be cancelling a visit with US farmers, a gesture that was seen as a sign of good faith. The S&P 500 Index shed the early morning gains and traded lower by over half of one percent, impacted by the settlement of open options and futures positions given the end of week expiration. The S&P 500 Index is dancing around the psychologically important 3000 level, bound between short term resistance at 3020 and support at 2950. Short-term momentum has stalled in the past couple of weeks, which leads to the possibility of a test of the aforementioned level of support. The period between Quadruple Witching (Friday) and the end of September has been the weakest time of the year for broad equity benchmarks, therefore a pullback over this timeframe would be normal.
For the week, the large-cap benchmark closed lower by a similar half of one percent. Given the events that occurred in the week with the attack on the oil production facility in Saudi Arabia and then the news to end the week that poured cold water on the progression of trade talks between the US and China, the drawdown for the week, maintaining levels above support at 2950, still shows the resiliency of investors following the August breakout of the trading range between 2820 and 2950. The headline risks remain elevated, which could change the status on a moments notice, however, in this environment, it is difficult to be overly long or overly short given the unpredictability of what will be delivered next. In the Seasonal Advantage Portfolio that we manage in partnership with Castlemoore, we are attempting to keep our tentacles in anything that shows a positive bias in the September/October period, including Canadian Financials, Health Care, Canadian Utilities, Technology, and Gold, each of which have been adding value to the portfolio in recent weeks.
On the economic front, a report on retail sales in Canada was released before Friday’s opening bell. The headline print indicates that sales increased by 0.4% in July, which is marginally weaker than the 0.5% increase that was forecasted by analysts. The result places the year-over-year change at +1.2%. Stripping out the seasonal adjustments, retail sales in Canada was actually unchanged (0.0%) in July, which is firmly better than the 1.3% decline that is average for the month. The year-to-date change now sits at +2.2%, which is a full eight percent above the seasonal average trend through the first seven months of the year. We sent out further insight to subscribers. Signup now and we’ll send you our report.
Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.05.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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