Stock Market Outlook for June 10, 2020
Employers have been pulling job openings for the past year and the pandemic just gives them further excuse to ratchet back on future growth plans.
*** 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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Eli Lilly & Co. (NYSE:LLY) Seasonal Chart
Westshore Terminals Investment Corp. (TSE:WTE.TO) Seasonal Chart
Expedia, Inc (NASD:EXPE) Seasonal Chart
Life Storage, Inc. (NYSE:LSI) Seasonal Chart
SBA Communications Corp. (NASD:SBAC) Seasonal Chart
STORE Capital Corp. (NYSE:STOR) Seasonal Chart
The Markets
Stocks drifted lower on Tuesday as investors booked profits from the rally over the past few weeks. The S&P 500 Index shed almost eight-tenths of one percent, closing just above 3200. Momentum indicators remain overbought and they are now showing early signs of rolling over. Resistance remains significant in the range of 3250 to 3325, while the levels of support below remain plentiful, including major moving averages and levels within the previous broken range between 2800 and 2950.
On the economic front, the monthly Job Openings and Labor Turnover Survey (JOLTS) was released during Tuesday’s session. The headline print of April’s report indicated that openings declined by 16.1% in the month to 5.046 million. Analysts were only expecting a decline of 4.3% to 5.75 million. Stripping out the seasonal adjustments, openings actually declined by 8.7% to 5.347 million in April, which is a negative divergence compared to the 13.4% increase that is average for the month. The year-to-date change is down by 10.5% through the end of April, which is a distinct shift compared to the 31.8% increase that is average through the first four months of the year. Job openings have been declining for the past year and the pandemic just gives further reason for employers to ratchet back on future growth plans. We sent out further insight to subscribers intraday. Subscribe now.
Also on the economic front, a report on wholesale sales and inventories was released during Tuesday’s session. The headline print indicated that wholesale sales fell by 16.9% in April, while inventories expanded by 0.3%. Analysts had expected sales to decline by 4.0%, while inventories were expected to rise by 0.4%. Stripping out the seasonal adjustments, wholesale sales actually fell by 18.4% in April, much weaker than the 3.4% decline that is average for this time of year. Meanwhile, inventories were lower by 0.4%, weaker than the 0.1% decline that is average for the fourth month of the year. The year-to-date trends for each remain firmly below average, disconnected from seasonal norms given the ongoing pandemic. Subscribers can login to the chart database to view all of the charts for this report at the following link: https://charts.equityclock.com/u-s-wholesale-trade-sales-and-inventories
Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.70. Investor complacency remains elevated.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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