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Stock Market Outlook for April 27, 2020


Shares of Boeing breaking below a triangle consolidation range following indication that a record number of aircraft orders were withdrawn in March.

 

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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Boston Beer Co. Cl A (NYSE:SAM) Seasonal Chart

Boston Beer Co. Cl A (NYSE:SAM) Seasonal Chart

Equitable Group Inc. (TSE:EQB.TO) Seasonal Chart

Equitable Group Inc. (TSE:EQB.TO) Seasonal Chart

SAIA Inc. (NASD:SAIA) Seasonal Chart

SAIA Inc. (NASD:SAIA) Seasonal Chart

Kellogg Co. (NYSE:K) Seasonal Chart

Kellogg Co. (NYSE:K) Seasonal Chart

Kimberly Clark Corp. (NYSE:KMB) Seasonal Chart

Kimberly Clark Corp. (NYSE:KMB) Seasonal Chart

Alleghany Corp. (NYSE:Y) Seasonal Chart

Alleghany Corp. (NYSE:Y) Seasonal Chart

First Asset Investment Grade Bond ETF (TSE:FIG.TO) Seasonal Chart

First Asset Investment Grade Bond ETF (TSE:FIG.TO) Seasonal Chart

 

 

The Markets

Stocks drifted higher on Friday as oil prices firmed and portfolio managers rebalanced their books into some of the beaten down areas of the market.  Financials and materials joined perpetual market leaders of technology and consumer discretionary to fuel the S&P 500 Index higher by 1.39%.  The benchmark is making another run at levels above the 50-day moving average, a variable hurdle that index has been pinned to for the past week.  Momentum indicators continue to roll over as the rebound rally from the March low show signs of exhaustion.  Now that the market has alleviated the stretched conditions that existed at the highs in February and the lows in March, stocks may need a catalyst in this middle-ground of the year-to-date range in order to fuel the next move.

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For the week, the large-cap benchmark was down by 1.32% over the past five sessions, closing within the range of the prior week’s open to close span.  This is the first week in this rebound attempt that neither the open nor close made any progress above the prior week’s range, raising concern that the rebound in stocks from the March low may be losing steam.  The weekly candlestick has a rather indecisive appearance, precisely at a point of potential resistance around 2900.  It was back at the start of March that a similar indecisive candlestick was apparent at the then 2900 level of support, which ultimately ending up breaking down, leading to indiscriminate selling pressures in the weeks thereafter.  It is logical for the benchmark to react and perhaps pause at its breakdown point.  Our near-term risk range continues to point to a high of around 3000 to a low of around 2500, presenting an ideal framework to either take down risk around the upper limit of the range, or ramp up risk in the lower limit as the market digests the supply of stock overhead.

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On the economic front, a report on durable goods orders in the US was released before Friday’s opening bell.  The headline print of March’s report indicated that new orders in the US declined by 14.4% last month, which is weaker than the consensus analyst estimate that called for a decline of 11.7%. Core capital goods orders, however, were actually up by 0.1%, which was a shock to analysts that were expecting a decline of 5.0%. Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually declined by 1.8% in March, which is much weaker than the 15.4% increase that is average for the third month of the year. The year-to-date change is now down 4.1% through the first quarter, which is well below the 6.0% increase that is average through the first three months of the year.  We sent out further insight to subscribers intraday.  Signup now and we’ll send you this insight.

Value of Manufacturers' New Orders for Durable Goods Industries Seasonal Chart

The category in the durable goods report that really stood out was non-defense aircraft orders, which dipped negative for the first time since 2009.  This is an extraordinary outcome that emphasizes the compounding problems at Boeing as it battles with not just the grounding of its 737 MAX plane, but also the struggles in the airline industry related to the economic shutdown.  Shares of Boeing, which had been a market darling for years, are now down around 70% from its all-time high charted in March of 2019.  Significant support on the chart can be picked out at $100, which has been the basis for the recent rebound attempt, but Friday’s over 6% decline suggests that this rebound may be concluding.  The stock broke below a triangle consolidation pattern and fell below short-term support around $132.  Seasonally, the stock has historically gained between the end of March and the end of June, coinciding with the strongest quarter of the year for free cash flow growth, but this is a company that has been disconnected from seasonal norms for some time, even prior to the coronavirus event.  The company reports earnings on Wednesday, which will provide traders with a catalyst to mull over in the days ahead.

UNAPNO

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Boeing Co. (NYSE:BA) Seasonality

Sentiment on Friday, as gauged by the put-call ratio, ended slightly bearish at 1.02.

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Just in…

The Money Show will be holding a Canadian Webinar series on May 7th, containing a lineup of well-known Canadian talent…and we’ll be there too.  The topic of our presentation is “Using Seasonality to Invest in an Abnormal Economic Environment.”  Attendance is free.  Click the banner below to reserve your spot now.

 

Seasonal charts of companies reporting earnings today:

Canadian National Railway Company Seasonal Chart Keurig Dr Pepper Inc. Seasonal Chart NXP Semiconductors N.V. Seasonal Chart PPG Industries, Inc. Seasonal Chart Alexandria Real Estate Equities, Inc. Seasonal Chart CMS Energy Corporation Seasonal Chart Check Point Software Technologies Ltd. Seasonal Chart Cincinnati Financial Corporation Seasonal Chart Brown & Brown, Inc. Seasonal Chart Celanese Corporation Seasonal Chart Universal Health Services, Inc. Seasonal Chart Cognex Corporation Seasonal Chart Packaging Corporation of America Seasonal Chart Principal Financial Group Inc Seasonal Chart F5 Networks, Inc. Seasonal Chart National Oilwell Varco, Inc. Seasonal Chart ONE Gas, Inc. Seasonal Chart Lincoln Electric Holdings, Inc. Seasonal Chart Armstrong World Industries Inc Seasonal Chart QTS Realty Trust, Inc. Seasonal Chart TCF Financial Corporation Seasonal Chart Crane Co. Seasonal Chart Affiliated Managers Group, Inc. Seasonal Chart Avnet, Inc. Seasonal Chart Simpson Manufacturing Company, Inc. Seasonal Chart OneMain Holdings, Inc. Seasonal Chart J & J Snack Foods Corp. Seasonal Chart Amkor Technology, Inc. Seasonal Chart CNX Resources Corporation Seasonal Chart PotlatchDeltic Corporation Seasonal Chart Sterling Bancorp Seasonal Chart Dorman Products, Inc. Seasonal Chart Cathay General Bancorp Seasonal Chart Sanmina Corporation Seasonal Chart NIC Inc. Seasonal Chart WesBanco, Inc. Seasonal Chart WSFS Financial Corporation Seasonal Chart Banner Corporation Seasonal Chart CNX Midstream Partners LP Seasonal Chart Heartland Financial USA, Inc. Seasonal Chart Independent Bank Group, Inc Seasonal Chart K12 Inc Seasonal Chart Lakeland Financial Corporation Seasonal Chart HealthStream, Inc. Seasonal Chart Harmonic Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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