Stock Market Outlook for November 14, 2019
Consumer prices up 0.2% in October, stronger than the unchanged result that is average for this time of year.
*** 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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Superior Plus Corp. (TSE:SPB.TO) Seasonal Chart
Precision Drilling Corp. (TSE:PD.TO) Seasonal Chart
Embraer Aircraft (NYSE:ERJ) Seasonal Chart
Community Health Systems (NYSE:CYH) Seasonal Chart
Interfor Corp. (TSE:IFP.TO) Seasonal Chart
NAPCO Security Technologies, Inc. (NASD:NSSC) Seasonal Chart
Smith and Nephew PLC (NYSE:SNN) Seasonal Chart
Shoe Carnival, Inc. (NASD:SCVL) Seasonal Chart
Banco Bradesco (NYSE:BBD) Seasonal Chart
Madrigal Pharmaceuticals, Inc. (NASD:MDGL) Seasonal Chart
Mr. Cooper Group Inc. (NASD:COOP) Seasonal Chart
Becton Dickinson and Co. (NYSE:BDX) Seasonal Chart
Centene Corp. (NYSE:CNC) Seasonal Chart
Churchill Downs, Inc. (NASD:CHDN) Seasonal Chart
Rite Aid Corp. (NYSE:RAD) Seasonal Chart
The Markets
Stocks danced around the flatline on Wednesday as investors monitored developments regarding the progress of trade talks and Jerome Powell’s testimony in front the of the Joint Economic Committee. The S&P 500 Index added just less than a tenth of a percent, holding below short-term resistance at 3100. The short-term trend remains supported at the 50-hour moving average. As highlighted in yesterday’s report, momentum for the large-cap benchmark have been waning as investors digest the breakout from the past month. Stocks may need to regroup before the end of year strength that is typical of equity markets.
A concerning trend seems to be emerging for one of the sectors that is typically a market leader though the final months of the year. The consumer discretionary sector remains stuck in its summer range, undperforming the market quite significantly over the past month. Support around short and intermediate moving averages is also starting to struggle; the discretionary ETF (XLY) closed below both its 20 and 50-day moving averages on Wednesday. Price is now reaching the tip of a triangle consolidation pattern, the breakout from which will likely set the path of the intermediate trend. In addition, consumer staples is starting to outperform its more cyclical counterpart. The ratio of the consumer staples ETF (XLP) versus the consumer discretionary ETF (XLY) bounced higher from support around its 200-day moving average, hinting of a shift back towards some of the more defensive areas of the market. This is counter to the average trend that takes place at this time of the year when cyclicals outperform defensives, particularly those with exposure to the consumer. Further monitoring is warranted.
DISCRETIONARY Relative to the S&P 500 
On the economic front, a report on consumer prices in the US was released before Wednesday’s opening bell. The headline print of October’s Consumer Price Index showed an increase of 0.4%, elevating the year-over-year increase to 1.8%, marginally stronger than the 1.7% increase that was forecast by analysts. Less food and energy, the inflation gauge ticked higher by two-tenths of a percent, which actually resulted in a decline in the year-over-year change to 2.3% from 2.4% previous. Stripping out the seasonal adjustments, the consumer price index for all urban consumers increased by 0.2% in October, which is stronger than the unchanged result that is average for this time of year. The year-to-date change now sits higher by 2.4%, which is a tenth of one percent below the seasonal average trend. We sent out further insight to subscribers intraday. Subscribe now.
Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 1.00.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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