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Stock Market Outlook for January 30, 2020


Risk sentiment at levels of long-term support, at least according to these metrics.

 

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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Carlisle Cos, Inc. (NYSE:CSL) Seasonal Chart

Carlisle Cos, Inc. (NYSE:CSL) Seasonal Chart

EnerSys Inc. (NYSE:ENS) Seasonal Chart

EnerSys Inc. (NYSE:ENS) Seasonal Chart

Chart Industries Inc. (NASD:GTLS) Seasonal Chart

Chart Industries Inc. (NASD:GTLS) Seasonal Chart

TETRA Technologies (NYSE:TTI) Seasonal Chart

TETRA Technologies (NYSE:TTI) Seasonal Chart

iShares Latin America 40 ETF (NYSE:ILF) Seasonal Chart

iShares Latin America 40 ETF (NYSE:ILF) Seasonal Chart

Renaissance IPO ETF (AMEX:IPO) Seasonal Chart

Renaissance IPO ETF (AMEX:IPO) Seasonal Chart

 

 

The Markets

Stocks closed mixed on Wednesday, despite an upbeat start to the session as investors reacted positively to earnings from tech-titan Apple.  The S&P 500 Index closed down by just less than a tenth of one percent, rolling over intraday after failing to exceed the upper limit of the gap that was opened on Monday.  That level, approximately at 3290, presents a point of short-term resistance for stocks, which, until exceeded, is keeping the ultra short-term trend of lower-lows and lower-highs intact.  Momentum indicators on the hourly look continue to show bearish characteristics, but, as suggested in yesterday’s outlook, the short-term nature of the view could change abruptly.  Seasonally, equity markets remain in this short-term period of weakness into February, leading to appealing buying opportunities for the next period of strength that runs between March and May.

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Some key gauges of risk sentiment are returning to levels last seen in the third quarter of 2019, just prior to the breakout move in equity benchmarks that was realized in the quarter that followed.  The ratio of the Consumer Discretionary versus the Consumer Staples ETF (XLY vs. XLP) is back around the lower limit of a descending triangle pattern.  The ratio of the Dow Jones Transportation Average versus the Dow Jones industrial Average is showing the same.  The ratio of the Emerging Market ETF (VWO) versus the Developed Market ETF (VEA) is back to the 52-week low charted in the fourth quarter.  In the bond market, the ratio of the Junk Bond ETF (JNK) versus the Investment Grade Corporate Bond ETF (LQD) is testing the multi-year lows last charted in August.  And in the commodity market, the ratio of Copper versus Gold is back to levels around multi-decade lows.  The ratios of risk versus defense are all hovering around major levels of support, suggesting that positive risk sentiment never really got off the ground in the ramp higher in equity markets in the past few months, at least by these metrics.  The next move could be critical as a break below the significant levels of support could suggest a whole new round of risk aversion that would likely coincide with broader equity market weakness.  This is not the base case for us, however, we must always account for the risks in the market, even if they are not foreseen.  Seasonally, risk typically outperforms defense between now and May.

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Briefly on Wednesday’s inventory report from the Energy Information Administration (EIA), the string of inventory injections continue.  Crude oil inventories expanded by 3.5 million barrels last week, while gasoline inventories grew by 1.2 million barrels.  The result inflated the days of supply of each with oil moving from 25.2 to 25.9 and gasoline moving from 30.3 to 30.6.  The average for each at this time of year is 22.4 and 27.0, respectively.  We’ll provide expanded commentary in our daily outlook distribution that we send to subscribers.  Signup now to be added to the list.

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

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

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.83.

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Seasonal charts of companies reporting earnings today:

Amazon.com, Inc. Seasonal Chart Visa Inc. Seasonal Chart Verizon Communications Inc. Seasonal Chart Coca-Cola Company (The) Seasonal Chart Eli Lilly and Company Seasonal Chart Thermo Fisher Scientific Inc Seasonal Chart Amgen Inc. Seasonal Chart Danaher Corporation Seasonal Chart United Parcel Service, Inc. Seasonal Chart Altria Group Seasonal Chart The Blackstone Group Inc. Seasonal Chart Truist Financial Corporation Seasonal Chart Northrop Grumman Corporation Seasonal Chart Raytheon Company Seasonal Chart Vertex Pharmaceuticals Incorporated Seasonal Chart Enterprise Products Partners L.P. Seasonal Chart Marsh & McLennan Companies, Inc. Seasonal Chart Sherwin-Williams Company (The) Seasonal Chart Biogen Inc. Seasonal Chart Edwards Lifesciences Corporation Seasonal Chart DuPont de Nemours, Inc. Seasonal Chart Roper Technologies, Inc. Seasonal Chart Valero Energy Corporation Seasonal Chart Xcel Energy Inc. Seasonal Chart Electronic Arts Inc. Seasonal Chart Hershey Company (The) Seasonal Chart WEC Energy Group, Inc. Seasonal Chart Parker-Hannifin Corporation Seasonal Chart Alexion Pharmaceuticals, Inc. Seasonal Chart MSCI Inc Seasonal Chart ResMed Inc. Seasonal Chart Aptiv PLC Seasonal Chart Apollo Global Management, Inc Seasonal Chart Western Digital Corporation Seasonal Chart CMS Energy Corporation Seasonal Chart AmerisourceBergen Corporation (Holding Co) Seasonal Chart Arthur J. Gallagher & Co. Seasonal Chart Deutsche Bank AG Seasonal Chart W.W. Grainger, Inc. Seasonal Chart Dover Corporation Seasonal Chart International Paper Company Seasonal Chart Quest Diagnostics Incorporated Seasonal Chart Celanese Corporation Seasonal Chart Open Text Corporation Seasonal Chart Tractor Supply Company Seasonal Chart Eastman Chemical Company Seasonal Chart Tata Motors Ltd Seasonal Chart Apartment Investment and Management Company Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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