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Stock Market Outlook for December 13, 2019


Last week initial jobless claims showed one of the largest one-week spikes on record, but reason for concern is not yet warranted as post-Thanksgiving spikes are common.

 

Real Time Economic Calendar provided by Investing.com.

 

*** 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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Dividend 15 Split  (TSE:DFN.TO) Seasonal Chart

Dividend 15 Split (TSE:DFN.TO) Seasonal Chart

Hub Group, Inc. (NASD:HUBG) Seasonal Chart

Hub Group, Inc. (NASD:HUBG) Seasonal Chart

Cipher Pharmaceuticals Inc. (TSE:CPH.TO) Seasonal Chart

Cipher Pharmaceuticals Inc. (TSE:CPH.TO) Seasonal Chart

BorgWarner, Inc. (NYSE:BWA) Seasonal Chart

BorgWarner, Inc. (NYSE:BWA) Seasonal Chart

MBN Corp. (TSE:MBN.TO) Seasonal Chart

MBN Corp. (TSE:MBN.TO) Seasonal Chart

HollyFrontier Corp. (NYSE:HFC) Seasonal Chart

HollyFrontier Corp. (NYSE:HFC) Seasonal Chart

Vermilion Energy Inc. (TSE:VET.TO) Seasonal Chart

Vermilion Energy Inc. (TSE:VET.TO) Seasonal Chart

Rayonier, Inc. (NYSE:RYN) Seasonal Chart

Rayonier, Inc. (NYSE:RYN) Seasonal Chart

Fabrinet (NYSE:FN) Seasonal Chart

Fabrinet (NYSE:FN) Seasonal Chart

Darden Restaurants, Inc. (NYSE:DRI) Seasonal Chart

Darden Restaurants, Inc. (NYSE:DRI) Seasonal Chart

 

 

The Markets

Stocks jumped on Thursday amidst trade optimism following indications that the US and China had come to an agreement on a Phase 1 trade deal.  The S&P 500 Index jumped by almost nine-tenths of one percent, moving away from its rising 20-day moving average that had provided comfort to investors over the past week and a half.  Momentum indicators are once again pushing higher, suggesting a renewed MACD buy signal may be imminent in what looks to be a “whipsaw” action to start the month of December.  Seasonally, the first half of December is generally weak for major equity benchmarks, but the never-ending flow of trade headlines has kept investors on their toes.  The outcome of the trade negotiation is expected to set the tone through the back half of the month.  This period, generally associated with the Santa Claus rally, tends to see all of those areas that were sold off the most or depressed in the first half realize buying demand in the back half as tax loss selling and overall portfolio reallocations ahead of the end of the year start to conclude.

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The news on Thursday wasn’t all butterflies and rainbows, however.  Initial jobless claims, typically a leading indicator of the health of the job market, surged to the highest level in over two years.  The level of the initial claimant count at 252,000 was much higher than the 213,000 that was expected by analysts.  Stripping out the seasonal adjustments, the actual level was 317,509, or an increase of 100,697 versus the week prior.  The year-to-date change went from –33.8% in the prior week to –3.1% in the week ended December 7th.  Spikes at this time of year are typical given the holiday disruption (Thanksgiving) from the week prior, however, this year’s surge certainly stands out given that it is one of the largest one-week increases on record.  The last one-week period that saw a larger increase was the week following Thanksgiving of 2005.  One data-point does not make a trend, but certainly jobless claims remain on our radar as we continue to monitor the health of the consumer, the driver of the economy.

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Also released was the latest gauge of producer prices in the US.  The important metric, the producer price index of finished goods less the more volatile elements of food and energy, ticked lower by 0.2%, missing the consensus estimate that called for a gain of the same magnitude.  The year-over-year change now sits at +1.3%, a gap compared to the expected increase of 1.7%.  Stripping out the seasonal adjustments, the actual increase of this group of goods was 0.1%, inline with the average increase for this time of year.  The year-to-date change is higher by 1.5%, which is two-tenths of a percent below the seasonal average trend with just one month left in the year to report.  We’ve uploaded the charts for the Producer Price Index (PPI) and Consumer Price Index (CPI) to the chart database.  Subscribers can login and browse these charts showing how the present data relates to historical norms via the following link: https://charts.equityclock.com/u-s-consumer-price-index-cpi-producer-price-index-ppi

http://charts.equityclock.com/seasonal_charts/economic_data/WPUFD4131_seasonal_chart.PNG

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.72.

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Seasonal charts of companies reporting earnings today:

  • No significant earnings scheduled

 

S&P 500 Index

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TSE Composite

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