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Stock Market Outlook for April 2, 2020


Gasoline days of supply jumps to the highest level for this time of year in 25 years as demand for the product evaporates.

 

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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Merck & Co., Inc. (NYSE:MRK) Seasonal Chart

Merck & Co., Inc. (NYSE:MRK) Seasonal Chart

Liquidity Services Inc. (NASD:LQDT) Seasonal Chart

Liquidity Services Inc. (NASD:LQDT) Seasonal Chart

Meta Financial Group, Inc. (NASD:CASH) Seasonal Chart

Meta Financial Group, Inc. (NASD:CASH) Seasonal Chart

Safe Bulkers Inc. (NYSE:SB) Seasonal Chart

Safe Bulkers Inc. (NYSE:SB) Seasonal Chart

Tandy Leather Factory, Inc. (NASD:TLF) Seasonal Chart

Tandy Leather Factory, Inc. (NASD:TLF) Seasonal Chart

Invesco Taxable Municipal Bond ETF (NYSE:BAB) Seasonal Chart

Invesco Taxable Municipal Bond ETF (NYSE:BAB) Seasonal Chart

Nuveen Build America Bond Fund (NYSE:NBB) Seasonal Chart

Nuveen Build America Bond Fund (NYSE:NBB) Seasonal Chart

Vanguard Long-Term Government Bond ETF (NASD:VGLT) Seasonal Chart

Vanguard Long-Term Government Bond ETF (NASD:VGLT) Seasonal Chart

 

 

The Markets

Stocks had another tough outing on Wednesday as markets opened the new quarter lower, giving back some of the end of quarter ramp that saw equity benchmark find a low in the final week of the month.  The S&P 500 Index shed 4.41%, turning lower at its declining 20-day moving average, which had acted as resistance for the past few sessions.  Daily momentum indicators are showing signs of turning lower again, continuing to show bearish characteristics, as we once again look for levels of potential support.  The biggest level is not the March low at 2191, but rather the open gap around 2350, also approximately equivalent to the December 2018 low.  This is a level that traders have clearly reacted to and it presents a logical test to either verify or defeat support at the March low.  We provide further technical analysis in our market outlook emailed to subscribers nightly.  Signup now.

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On the economic front, a report on construction spending in the US was released during Wednesday’s session.  The headline print indicated that spending on construction projects declined by 1.3% in February, which is weaker than the 0.6% increase that was expected by analysts.  The year-over-year change fell to gain of 6.0% from a gain of 8.0% previous.  Stripping out the seasonal adjustments, construction spending actually increased by 0.6% in the second month of the year, with is stronger than the 0.2% increase that is average for February.  The year-to-date change is hovering 3.5% above the seasonal average trend, which is the second best pace to start the year in the past two decades.  As with other economic reports through the end of February, there is no material impact resulting from the coronavirus apparent in the results, but this would be expected to change.  Subscribers can login to the chart database and view all of the seasonal charts for this report at the following link: https://charts.equityclock.com/u-s-construction-spending

Total Construction Spending  Seasonal Chart

Also released on Wednesday was the latest tally of petroleum inventories in the US.  The Energy Information Administration (EIA) reported that oil inventories increased by a whopping 13.8 million barrels last week, which is not even on the same page as the approximately 4.0 million barrel increase that was expected by analysts. Gasoline stockpiles, similarly, showed a pronounced rise, increasing by 7.5 million barrels. The result saw the days of supply of oil rise by 1.2 to 30.1, while gasoline days of supply rose by 2.7 to 28.5. The average days of supply for each at this time of year is 23.8 and 25.4, respectively.  We sent out further insight to subscribers intraday.  Signup now and we’ll send you this along with our 67-page monthly report that breaks down everything you need to know for the month ahead.

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

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.19.  Investors continue to aggressively hedge portfolios, which, at some point, will help to alleviate selling pressures as the requirement to sell is typically alleviated.

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Seasonal charts of companies reporting earnings today:

Walgreens Boots Alliance, Inc. Seasonal Chart CarMax Inc Seasonal Chart Acuity Brands, Inc. Seasonal Chart Apogee Enterprises, Inc. Seasonal Chart Dave & Buster's Entertainment, Inc. Seasonal Chart Resources Connection, Inc. Seasonal Chart Schnitzer Steel Industries, Inc. Seasonal Chart Navigator Holdings Ltd. Seasonal Chart Franklin Covey Company Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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