Stock Market Outlook for October 15, 2019
Treasury ETFs showing a lower-high, concluding a trend of higher-highs and higher-lows that has been intact since last November.
*** 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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Grifols, SA (NASD:GRFS) Seasonal Chart
Nordson Corp. (NASD:NDSN) Seasonal Chart
Caesars Entertainment Corp. (NASD:CZR) Seasonal Chart
Eagle Bancorp, Inc. (NASD:EGBN) Seasonal Chart
AMN Healthcare Services, Inc. (NYSE:AMN) Seasonal Chart
CBS Corp. (NYSE:CBS) Seasonal Chart
Hawaiian Holdings, Inc. (NASD:HA) Seasonal Chart
Domtar Corp. (NYSE:UFS) Seasonal Chart
T. Rowe Price Associates, Inc. (NASD:TROW) Seasonal Chart
Signature Bank (NASD:SBNY) Seasonal Chart
Ball Corp. (NYSE:BLL) Seasonal Chart
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) Seasonal Chart
Agilent Technologies, Inc. (NYSE:A) Seasonal Chart
Snap On Inc. Holding Co. (NYSE:SNA) Seasonal Chart
Advanced Semiconductor (NYSE:ASX) Seasonal Chart
Biogen Inc. (NASD:BIIB) Seasonal Chart
Owens Illinois, Inc. (NYSE:OI) Seasonal Chart
Werner Enterprises, Inc. (NASD:WERN) Seasonal Chart
Cheesecake Factory Inc. (NASD:CAKE) Seasonal Chart
PulteGroup, Inc. (NYSE:PHM) Seasonal Chart
Illumina, Inc. (NASD:ILMN) Seasonal Chart
Metlife, Inc. (NYSE:MET) Seasonal Chart
Sherwin Williams Co. (NYSE:SHW) Seasonal Chart
The Markets
Stocks surged on Friday as news crossed the tape that progress on trade negotiations was being made. The S&P 500 Index jumped higher by 1.09%, moving above declining trendline resistance that has been highlighted in recent sessions. A short-term trend of higher-highs and higher-lows has been confirmed, suggesting a shift in trajectory from negative to positive.
For the week, the S&P 500 Index was higher by around two-thirds of one percent, holding support on a weekly closing basis around the 20-week moving average. An intermediate rising trend channel shows its limits approximately between 2860 and 3100, although negative momentum divergences that have been apparent over the past few month does raise questions as to the health of this intermediate path.
The session was overwhelmingly risk-on on Friday. Cyclicals sectors topped the leaderboard, while defensives, including staples, utilities, and REITs, closed in the red. Bond prices also closed lower with many treasury funds suggesting a lower-high and the conclusion to the trend of higher-highs and higher-lows that has benefitted the fixed income market since last November. Once again, the defensive bet is attempting to unwind, presenting a possible catalyst for the cyclical trade to excel. Cyclicals tend to find their footing in the month of October, trading higher through the spring of next year. The activity in recent days is encouraging for this average tendency ahead.
On the economic front, Statscan released labour market statistics before Friday’s opening bell. The headline print of September’s report indicates that employment increased by 53,700 last month, which is much higher than the 5,000 increase that was expected by analysts. The unemployment rate ticked lower by two-tenths to 5.5%, just a tenth of a percent above the May record low of 5.4%. Stripping out the seasonal adjustments, employment actually declined by 69,100, or 0.4%, which is much stronger than the 1.1% decline that is average for this time of year. The year-to-date change is now back above the seasonal average trend by half of one percent, which is the strongest pace since 2002. We sent out further insight to subscribers intraday, including comments on the Canadian Dollar, which surged following the result. Subscribe now and we’ll send you our report.
Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.95.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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