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Stock Market Outlook for June 8, 2020


The total put-call ratio has fallen to the lowest level since the middle of December, emphasizing that along with the increase in equity prices, complacency has risen as well.

 

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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Duke Energy Corp. (NYSE:DUK) Seasonal Chart

Duke Energy Corp. (NYSE:DUK) Seasonal Chart

Consolidated Edison, Inc. (NYSE:ED) Seasonal Chart

Consolidated Edison, Inc. (NYSE:ED) Seasonal Chart

American Water Works Co. Inc. (NYSE:AWK) Seasonal Chart

American Water Works Co. Inc. (NYSE:AWK) Seasonal Chart

Standex Intl Corp. (NYSE:SXI) Seasonal Chart

Standex Intl Corp. (NYSE:SXI) Seasonal Chart

Avita Medical Ltd. (NASD:RCEL) Seasonal Chart

Avita Medical Ltd. (NASD:RCEL) Seasonal Chart

Procter & Gamble Co. (NYSE:PG) Seasonal Chart

Procter & Gamble Co. (NYSE:PG) Seasonal Chart

MGE Energy, Inc. (NASD:MGEE) Seasonal Chart

MGE Energy, Inc. (NASD:MGEE) Seasonal Chart

 

 

The Markets

Stocks surged on Friday following the release of the monthly employment report for May, which indicated an unexpected increase in employment.  The Bureau of Labor Statistics indicates that 2.509 million payrolls were added last month, which is the largest one month increase for payrolls on record. Analysts had expected a decline of 7.725 million and not a single analyst expected an increase. The consensus range was between a loss of 3.5 million to a loss of 11 million. The unemployment rate ticked lower from 14.7% to 13.3%, which still represents the highest jobless rate since the Depression era. Average hourly earnings, meanwhile, dipped by 1.0%, which is a divergence compared to the 0.9% increase that was expected. Stripping out the seasonal adjustments, payrolls actually increased by 2.931 million, or 2.2%, in May, which is the largest May percentage increase since 1941 when payrolls expanded by 2.5%. The average change for this time of year is a mere 0.6%. The result maintains the reputation of May being a strong month for payroll growth; there has not been a decline in payrolls for the month of May since 1954. The year-to-date change is now down by 12.8%, still far below the 0.3% increase that is average through the first five months of the year. This remains the sharpest drop into the spring on record.  We sent out further insight to subscribers intraday.  Subscribe now.

Total Nonfarm Seasonal Chart

The S&P 500 Index gained 2.62% in the final trading session of the week, moving beyond short-term support at 3100.  As has been highlighted in recent reports, resistance between 3250 and 3325 is the big hurdle to watch as this is the open gap from the February peak that has gone unfilled throughout this market gyration.  Major moving averages are all curling higher, providing levels of support below.  The relative strength index is now firmly embedded in overbought territory, moving above 70 for the first time since January.  Momentum indicators continue to point higher, including an expanding MACD histogram.

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For the week, the large-cap benchmark was higher by 4.91%, charting the best weekly return since the start of April.  The benchmark has moved beyond resistance at the 50-week moving average and momentum indicators continue on an upswing.  The range of resistance between 3250 and 3325 is clearly apparent overhead, presenting a rare gap on a weekly scale that has gone untested for a prolonged period of time.  It will be difficult for the benchmark to overcome this potential barrier in one swing.

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North of the border, Statscan released employment data of its own.  The headline print of May’s Labour Force Survey in Canada indicates that employment increased by 290,000, which is a significant positive divergence compared to the consensus estimate that called for a decline of 1.6 million. Still, despite the increase, the unemployment rate ticked higher from 13.0% in April to 13.7% in May, which is better than the 16.2% rate expected by analysts. Stripping out the seasonal adjustments, employment actually increased by 620,500, or 3.9%, in May, representing the strongest May percentage increase on record. The average change for the month is an increase of 2.3%. Year-to-date, employment is down by 12.9%, a drawdown not matched by any time in at least the past four decades of data that we have on record. The average change through the first five months of the year is an increase of 2.0%.  We sent out further insight to subscribers intraday.  Signup now to access this distribution within the report archive.

http://charts.equityclock.com/seasonal_charts/economic_data/v2064890_seasonal_chart.PNG

Sentiment on Friday, as gauged by the put-call ratio, ended overly bullish at 0.65.  This is the lowest level since the middle of December, emphasizing that along with the increase in equity prices, complacency has risen as well.

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Seasonal charts of companies reporting earnings today:

Caseys General Stores, Inc. Seasonal Chart Thor Industries, Inc. Seasonal Chart Calavo Growers, Inc. Seasonal Chart Banco BBVA Argentina S.A. Seasonal Chart Ferroglobe PLC Seasonal Chart Safe Bulkers, Inc Seasonal Chart

 

 

 

S&P 500 Index

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TSE Composite

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