Stock Market Outlook for March 18, 2020
US retail sales was trending 1.8% above average through January and February, representing the strongest start to the year since 2013.
*** 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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Coca Cola Co. (NYSE:KO) Seasonal Chart
Linamar Corp. (TSE:LNR.TO) Seasonal Chart
Discovery, Inc. (NASD:DISCA) Seasonal Chart
MGM Resorts International (NYSE:MGM) Seasonal Chart
Cemtrex Inc. (NASD:CETX) Seasonal Chart
Algoma Central Corp. (TSE:ALC.TO) Seasonal Chart
iShares JPMorgan USD Emerging Markets Bond ETF (NASD:EMB) Seasonal Chart
Vanguard Consumer Staples ETF (NYSE:VDC) Seasonal Chart
The Markets
Equity markets continue to “yo-yo” as investors attempt to get a grasp of the amount of economic damage that will result from the coronavirus. The S&P 500 Index gained an even six percent, clawing back about half of Monday’s loss. The benchmark is attempting to rebound from oversold levels, however, judging by Tuesday’s candlestick, traders remain highly uncertain about taking a stance at pegging a low. The zig-zag trading range during Tuesday’s session resulted in the formation of a rather indecisive candle with long upper and lower wicks. The action was certainly reminiscent of a battle between the bulls and the bears. Major moving averages continue to roll over, suggesting negative trends across short, intermediate, and long-term timescales. We provide further technical analysis for subscribers, including the level on the S&P 500 that you should start buying this market. Signup now to stay up-to-date.
On the economic front, a report on retail sales in the US was released before Tuesday’s opening fell. The headline print of February’s report indicated that activity fell by 0.5% in February, which is weaker than the 0.2% increase that was expected by analysts. Less gas and autos, retail trade was down by 0.2%, which is a miss versus the 0.4% increase that was expected by analysts. Stripping out the adjustments, retail sales actually fell by 1.1% versus the month prior. This is weaker than the 0.4% decline that is average for February. The year-to-date change is now 1.8% above the seasonal average trend, which is still the strongest start to the year since 2013. The result follows a stellar 2019 when overall retail trade was higher by 5.8%, the best pace since 2010 as the economy emerged from the recession. Signup now and we’ll tell you what the results mean and what to expect ahead.
Also released to subscribers was our report on US Industrial Production. Tracking these metrics against what is normal for this time of year is going to become vitally important ahead as we gauge the impact of the coronavirus on the economy. Subscribe now to follow along with us and we’ll highlight everything you need to know without the spin and manipulation that is common with economic reports.
Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bearish at 1.01.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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