Stock Market Outlook for April 23, 2020
Stocks rebounded on Wednesday as energy bears became skittish amidst a glimmer of hope for oil prices ahead.
*** 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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Medtronic, Inc. (NYSE:MDT) Seasonal Chart
Atmos Energy Corp. (NYSE:ATO) Seasonal Chart
Techne Corp. (NASD:TECH) Seasonal Chart
OceanFirst Financial Corp. (NASD:OCFC) Seasonal Chart
Bridge Bancorp Inc. (NASD:BDGE) Seasonal Chart
TransAlta Corp. (NYSE:TAC) Seasonal Chart
First Trust Utilities AlphaDEX Fund (NYSE:FXU) Seasonal Chart
The Markets
Stocks rebounded on Wednesday as the price of oil traded higher, “fuelling” the stocks in the beleaguered energy sector. The S&P 500 Index climbed higher by 2.29%, moving into the gap that we have been highlighting in recent days between 2800 and 2830. Struggle around the declining 50-day moving average remains apparent on the chart. Daily momentum indicators continue to show signs of rolling over, hinting that sell triggers may be imminent. The S&P 500 Index has been on a buy signal according to MACD since March 26th. The large-cap benchmark continues to battle with massive overhead supply portrayed by the trading range between 2700 and 3000 that the index has spent the majority of time trading within over the past couple of years. This remains a logical point for the benchmark to, at least, pause following a valiant rebound attempt. In our market outlook to subscribers, we breakdown some of the positive revelations pertaining to the energy sector that have the bears skittish. Subscribe now and we’ll send you this insight.
On the economic front, Statscan released consumer inflation data for the month of March. The Consumer Price Index in Canada declined by 0.6% last month, which is a miss versus the consensus analyst estimate that called for a decline of 0.4%. The year-over-year change is now down to +0.9%, off from the +2.2% annual change that was seen in February. As with everything else in the economy, the trend of CPI has become dislocated from seasonal norms. The average change for the price index in the month of March is an increase of 0.5%, supported by everything from transportation prices to the increase in the price of shelter. These are the areas that were notably hit in the month as the economy was forced to shut down in an effort to combat the spread of the coronavirus. Even the often stable category of electricity prices saw a decline as the government sought to give Canadians a break on their tiered pricing system amidst more people forced to self-isolate at home. Seasonally, consumer prices tend to see their steepest gains of the year through the spring as economic activity ramps up following the winter slowdown. With economic activity crippled, it remains unclear when or if this typical spring ramp will occur. Subscribers can login to the chart database to explore the seasonal charts for this report at https://charts.equityclock.com/canada-consumer-price-index-cpi
Sentiment on Wednesday, as gauged by the put-call, ended slightly bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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