Stock Market Outlook for December 9, 2019
US payrolls actually increased by 622,000, or 0.4%, in November, which is double the increase 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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BIOLASE, Inc. (NASD:BIOL) Seasonal Chart
Morguard Corp. (TSE:MRC.TO) Seasonal Chart
Candente Copper Corp. (TSE:DNT.TO) Seasonal Chart
Hudbay Minerals Inc. (NYSE:HBM) Seasonal Chart
Terex Corp. (NYSE:TEX) Seasonal Chart
ShawCor Ltd. (TSE:SCL.TO) Seasonal Chart
InterContinental Hotels Group PLC (NYSE:IHG) Seasonal Chart
General Finance Corp. (NASD:GFN) Seasonal Chart
Phillips 66 Partners LP (NYSE:PSXP) Seasonal Chart
Plains All American Pipeline, LP (NYSE:PAA) Seasonal Chart
Companhia Vale do Rio Doce SA (NYSE:VALE) Seasonal Chart
Pan American Silver Corp. (TSE:PAAS.TO) Seasonal Chart
Apache Corp. (NYSE:APA) Seasonal Chart
Bonterra Energy Corp. (TSE:BNE.TO) Seasonal Chart
Secure Energy Services Inc. (TSE:SES.TO) Seasonal Chart
Acadian Timber Corp. (TSE:ADN.TO) Seasonal Chart
Maple Leaf Foods, Inc. (TSE:MFI.TO) Seasonal Chart
Premium Brands Holdings Corp. (TSE:PBH.TO) Seasonal Chart
Denison Mines Corp. (TSE:DML.TO) Seasonal Chart
Amerigo Resources Ltd. (TSE:ARG.TO) Seasonal Chart
Constellation Software Inc. (TSE:CSU.TO) Seasonal Chart
The Markets
Stocks jumped on Friday following the release of a much stronger than expected payroll report for November. The Bureau of Labor Statistics indicates that 266,000 payrolls were added last month, which is a beat versus the consensus estimate that called for a rise of 180,000. The unemployment rate ticked lower to 3.5% from 3.6% and average hourly earnings were higher by 0.2%, a slight miss versus the consensus analyst estimate that called for a 0.3% gain. Stripping out the seasonal adjustments, payrolls actually increased by 622,000, or 0.4%, in November, which is double the increase that is average for this time of year. The year-to-date change versus the seasonal norm now sits 0.6% above average with one month left in the year to report. We sent out further insight to subscribers intraday. Not signed up yet? Subscribe now and we’ll send you our research directly to your inbox.
Following the release, the S&P 500 Index jumped back to levels around the all-time high as investors shook off the jitters that triggered multiple technical sell signals earlier in the week. The large-cap benchmark added just over nine-tenths of one percent, achieving the second highest closing level on record at 3145.91. Major moving averages continue to point higher, remaining resilient despite the early week dip. MACD remains on a sell signal, but the histogram suggests that the momentum indicator is once again converging on its signal line in what could provide renewed buy signal ahead.
While the daily chart has provided some conflicting signals, the weekly chart continues to show the hurdle that is overhead for the equity benchmark. The benchmark added less than two-tenths of a percent for the first five sessions of December, remaining below rising trend channel resistance that has kept a lid on the advance throughout the past eight months. The benchmark was at risk of realizing an outside reversal candlestick based on activity earlier in the week, which would have not only confirmed the level of resistance overhead, but also would have suggested further weekly losses ahead. The gains in the back half of the week mitigated that threat. Momentum indicators are showing signs of stalling following the advance from the early October low, implying that risk of a short term top around trend channel resistance remains. The days ahead bring a number of catalysts that investors are likely to react to including the December 15th tariff deadline and the UK general election.
North of the border, the employment results were not nearly as euphoric as the US. Statscan indicated that employment declined by 71,200 in November, which is significantly weaker than the unchanged result was expected by analysts. The unemployment rate ticked higher by four-tenths of one percent to 5.9%, which also was a miss compared to estimates of 5.6%. Stripping out the seasonal adjustments, employment actually declined by 135,500, or 0.7%, which is weaker than the 0.3% decline that is average for this time of year. The year-to-date change has now fallen slightly below the seasonal average trend, by less than a tenth of a percent. There are a number of data-points within this report that are diverging from the activity reported in the US. Subscribers received our insight in a late-day distribution that broke down the results. Subscribe now.
To be distributed to subscribers on Saturday: Our report on US Vehicle Sales for November. Don’t miss this important early glimpse of the strength of the consumer ahead of Friday’s report on Retail Trade.
Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.88.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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