Stock Market Outlook for November 25, 2019
US Dollar Index remains in a positive trend, but seasonal tendencies suggest that the currency benchmark may decline through the weeks ahead.
*** 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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Enghouse Systems Ltd. (TSE:ENGH.TO) Seasonal Chart
GMP Capital Inc. (TSE:GMP.TO) Seasonal Chart
Amtech Systems, Inc. (NASD:ASYS) Seasonal Chart
Hardwoods Distribution Inc. (TSE:HDI.TO) Seasonal Chart
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) Seasonal Chart
Covanta Holding Corp. (NYSE:CVA) Seasonal Chart
Corus Entertainment, Inc. (TSE:CJR/B.TO) Seasonal Chart
Bombardier (TSE:BBD/B.TO) Seasonal Chart
Providence Service Corp. (NASD:PRSC) Seasonal Chart
Norbord, Inc. (NYSE:OSB) Seasonal Chart
CONMED Corp. (NASD:CNMD) Seasonal Chart
AmerisourceBergen Corp. (NYSE:ABC) Seasonal Chart
The Markets
Stocks drifted higher on Friday as investors continue to monitor rhetoric pertaining to a trade deal between the US and China. The S&P 500 Index added just over two-tenths of one percent, maintaining support at the psychologically important 3100 level. MACD, RSI, and Stochastics have all triggered sell signals in recent days, suggesting the short-term trend may be exhausted. However, seasonal tendencies may have something to say for market activity over the next couple of weeks. We sent out a special report to subscribers earlier in the week highlighting the tendencies surrounding the US Thanksgiving holiday, including the anomaly that is apparent when Thanksgiving is later than average on the calendar. Subscribe now to login and view this report.
For the week, the large-cap benchmark saw its first negative return since the start of October. The market gauge was lower by a third of a percent, continuing to hold well above variable support at the 20-week moving average. Sector performance was mixed between cyclicals and defensives as investors rotate portfolios, once again; strength in health care and financials was offset by weakness in materials and REITs, which shed over one percent during the five-session span. The large-cap index continues to test levels around the upper limit of a rising intermediate trend channel.
A key determinant of market performance through the remaining weeks of the year continues to be stubborn. The US Dollar moved higher by around three-tenths of one percent last week, remaining supported by its rising 200-day moving average. Recent performance of the currency index through the month of October suggested a lower-high, potentially the start of a trend of lower-lows and lower-highs following the positive path that has dominated in 2019. November activity has failed to confirm this shift with recent lows remaining unviolated. The stronger dollar acts as a headwind to US corporations , which is ultimately reflected in their share prices. The headwind with respect to the currency typically reverts to a tailwind through the last five weeks of the year, thereby supporting equity prices, including the always scrutinized Santa Claus rally. We’ll continue to monitor developments accordingly as a lower dollar through year-end is preferred to support the positive tendencies for stocks that are common for this time of year.
Always a month behind the US in reporting retail sales, Statscan released its report for the month of September. The statistics agency reported that retail trade in this country fell by 0.1% in September, inline with the consensus analyst estimate. The result places the year-over-year change at +1.0%. Stripping out the seasonal adjustments, Canada Retail Trade actually fell by 7.1%, which is much weaker than the 3.9% decline that is average for September. The year-to-date change is now trending 5.5% above the seasonal average. We sent out further insight to subscribers intraday. Feeling left out? You can signup now to either the monthly or yearly subscription option and we’ll send these intraday reports directly to your inbox.
Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.96.
Sectors and Industries entering their period of seasonal strength:
$RUT Relative to the S&P 500 
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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