Stock Market Outlook for October 23, 2019
Existing home sales remain on the best pace in a decade, up 19.9%, year-to-date.
*** 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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Buckle, Inc. (NYSE:BKE) Seasonal Chart
Century Aluminum Co. (NASD:CENX) Seasonal Chart
Marten Transport, Ltd. (NASD:MRTN) Seasonal Chart
EZCORP, Inc. (NASD:EZPW) 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 dipped on Tuesday, giving up earlier gains, following headlines that the passage of a Brexit deal in the United Kingdom would not be forthcoming. The S&P 500 Index shed just over a third of one percent, yet again keeping this “dance” around the psychologically important 3,000 level alive. The coiled trading pattern from the past six months is poised to make a big move, one way or the other. Target upon a breakout from resistance at 3025 or breakdown below support at 2825 is 200-points in the direction of the break. As for what the catalyst will be or when it will be revealed is anybody’s guess.
On the economic front, a report on existing home sales was released during Tuesday’s session. The headline print of September’s report indicates that activity fell by 2.2% last month to a seasonally adjusted annual rate of 5.38 million. Analysts were expecting a rate of 5.44 million. Despite the downtick, the year-over-year change ticked higher from 2.8% to 3.9%. Stripping out the seasonal adjustments, existing home sales actually declined by 15.0% in September, which is marginally better than the 15.2% decline that is average for the final month of the third quarter. The year-to-date trend is now hovering 10.6% above average, which is the best pace in the past decade. Signup now to receive our insight directly to your inbox, including the investment implications, from a seasonal standpoint.
North of the border, a report on retail trade in Canada provided a look at the consumer economy in this country. Statscan indicates that retail trade fell by 0.1% in August, a shift from the 0.6% increase recorded in the month prior and a miss compared to the consensus analyst estimate that called for the same. The result places the year-over-year change at +1.1%. Stripping out the seasonal adjustments, Canada Retail Trade was unchanged (0.0%) in August, which is stronger than the 0.3% decline that is average for this late summer month. The year-to-date change is now trending 9.1% above the seasonal average. We sent out further insight to subscribers intraday. Subscribe now.
Sentiment on Tuesday, as gauged by the put-call ratio, ended close to neutral at 0.96.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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