Contact | RSS Feed

Stock Market Outlook for March 19, 2020


S&P 500 Index intersecting with the December 2018 low, a significant line in the sand for the equity market.

 

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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Constellation Brands, Inc. (NYSE:STZ) Seasonal Chart

Constellation Brands, Inc. (NYSE:STZ) Seasonal Chart

Oneok, Inc. (NYSE:OKE) Seasonal Chart

Oneok, Inc. (NYSE:OKE) Seasonal Chart

Rosetta Stone Inc. (NYSE:RST) Seasonal Chart

Rosetta Stone Inc. (NYSE:RST) Seasonal Chart

Colliers International Group Inc. (NASD:CIGI) Seasonal Chart

Colliers International Group Inc. (NASD:CIGI) Seasonal Chart

iShares MSCI Singapore ETF (NYSE:EWS) Seasonal Chart

iShares MSCI Singapore ETF (NYSE:EWS) Seasonal Chart

SPDR S&P Global Infrastructure ETF (NYSE:GII) Seasonal Chart

SPDR S&P Global Infrastructure ETF (NYSE:GII) Seasonal Chart

 

 

The Markets

Stocks closed firmly lower on Wednesday as the “up one day, down the next” trading pattern continues.  The S&P 500 Index closed down by 5.18%, which was well off of the low of almost 10% charted in the mid-afternoon session.  At the low of the day, the large-cap benchmark undercut the December 2018 bottom at 2346, however, the fact that buyers pushed back around this significant hurdle emphasizes the significance of this zone.  The session recorded a candlestick with a long lower-wick, suggestive of a market that is attempting to bottom.  We sent out further insight to subscribers, including how we’re positioning in the Seasonal Advantage Portfolio.  If you are currently subscribed to our service, be sure to follow along with our daily market outlooks emailed directly to you as it contains subscriber exclusive content pertaining to what we’re looking for and the playbook ahead for equity markets.

image

On the economic front, a report on housing starts was released before Wednesday’s opening bell.  The headline print of February’s report indicated that activity declined by 1.5% last month to a seasonally adjusted annualized rate of 1.599 million. Analysts were expecting a decline of 6.4% to a rate of 1.52 million. Stripping out the adjustments, starts actually declined by 0.2% in February, which is much weaker than the 4.4% increase that is average for this time of year. The year-to-date change is now 1.4% above the seasonal norm, down from the 5.5% above average rate seen in the last report. The result follows the best calendar year gain since 2012 when starts surged by 42.5% in 2019.  We sent further insight to subscribers intraday.  Signup now to be included on our list.

Housing Starts Seasonal Chart

Also released on Wednesday was the latest tally of petroleum inventories in the US.  The Energy Information Administration report that oil stockpiles increased by 2.0 million barrels last week, while product inventories shrank.  Gasoline inventories were lower by 6.2 million barrels and distillates were down by 2.9 million barrels.  The result now sees the days of supply of oil at 28.7, while the days of supply of gasoline is at 25.8.  The average for each for the middle of March is 23.6 and 26.2, respectively.  Despite the expectation of demand destruction resulting from the coronavirus, the change in the level of product supplied of gasoline, as gauge of demand, is trending strongly above average in 2020, which, in turn, is dragging the change in inventories firmly below the seasonal average trend.  This would otherwise be perceived as being bullish for the commodity as upbeat demand leading into the spring and summer driving season would help to alleviate elevated stockpile levels.  The trends on the oil side, aside from the days of supply, are only marginally above seasonal norms.  Evidence of demand destruction is not yet apparent by these metrics, but we know it is coming.  Beyond this initial surge in demand that is suspected to be related to extremely low gas prices for this time of year and the desire amongst consumers to “stockpile,” it seems only reasonable that the diminished activity in the economy (eg. fewer people driving to work, fewer flights, etc.) would be expected to have an impact on these metrics in the weeks ahead.  We’ll keep tracking the results.  Be sure to subscribe to our service so you don’t miss any updates.  Subscribers can login to the database and view the seasonal charts at the following link: https://charts.equityclock.com/u-s-eia-weekly-petroleum-status-report

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Weekly U.S. Days of Supply of Total Gasoline  (Number of Days) Seasonal Chart

The apparently bullish inventory report did little to calm the nerves of oil traders, who sent the price of oil lower by 22.7% to around $20, the lowest level since 2002.  The commodity has broken through every level of support that could have been expected of it as an all-out price war ensues between Russia and Saudi Arabia.  The next level of significance below the present level is the mid-$17 region, however, it is suspected that the price of West Texas Intermediate (WTI) would have difficulty sustaining levels below $20.  Stability in the price of oil has also become an essential element to stabilize the broader equity market.

image

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.33.

image

 

 

 

 

 

Seasonal charts of companies reporting earnings today:

Accenture plc Seasonal Chart Cintas Corporation Seasonal Chart Lennar Corporation Seasonal Chart Darden Restaurants, Inc. Seasonal Chart Momo Inc. Seasonal Chart Ollie's Bargain Outlet Holdings, Inc. Seasonal Chart Commercial Metals Company Seasonal Chart Enerpac Tool Group Corp. Seasonal Chart Scholastic Corporation Seasonal Chart Duluth Holdings Inc. Seasonal Chart Second Sight Medical Products, Inc. Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.