Stock Market Outlook for June 11, 2020
Do you have your position in Gold yet?
*** 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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Ventas, Inc. (NYSE:VTR) Seasonal Chart
Alexion Pharmaceuticals, Inc. (NASD:ALXN) Seasonal Chart
Healthpeak Properties Inc (NYSE:PEAK) Seasonal Chart
Stellus Capital Investment Corp. (NYSE:SCM) Seasonal Chart
The Markets
Stocks generally closed lower on Wednesday as the rotation away from some of the value/cyclical areas of the market continues following the massive run in recent weeks. The S&P 500 Index shed around half of one percent, continuing to consolidate very close to 3200. Momentum indicators continue to show early signs of rolling over from overbought territory as the parabolic rise in the benchmark is alleviated. Energy and financials led the market to the downside, while technology was the lone sector to close firmly higher.
On schedule for the Wednesday session, the Energy Information Administration(EIA) released its report on petroleum stockpiles for the week just past. The EIA reported that oil inventories increased by 5.7 million barrels last week, which is a divergence compared to the 1.7 million barrel decline that was expected by analysts. Gasoline and distillate stockpiles, meanwhile, increased by 0.9 million barrels and 1.6 million barrels, respectively. The result saw the days of supply of oil fall by four-tenths of a day to 40.9, while gasoline days of supply dipped by half a day to 35.1. The average days of supply for each at the start of June is 23.0 and 24.4, respectively. We sent out further insight to subscribers intraday. Subscribe now to see what this report is telling us of where oil prices should be supported through the months ahead.
On the economic front, a report on consumer prices in the US was released before Wednesday’s opening bell. The headline print indicated that the consumer price index (CPI) declined by 0.1% in May, which is weaker than the unchanged result that was expected. The year-over-year change is now almost flat at +0.1%, also weaker than the consensus analyst estimate that called for a year-over-year increase of 0.2%. Stripping out the seasonal adjustments, CPI was actually unchanged last month, which is weaker than the 0.3% increase that is average for this time of year. The year-to-date change is now down by 0.2%, which is well below the 2.0% increase that is average through the first five months of the year. Less food and energy, the year-to-date change is still in positive territory at 0.3%, but this is also well below the seasonal norm that calls for a 1.3% increase into this spring period. Significant increases in food prices are working to offset weakness in fuel, apparel, and transportation prices. The seasonal charts for this report have been uploaded to the database for subscribers to access at https://charts.equityclock.com/u-s-consumer-price-index-cpi-producer-price-index-ppi
Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.70. Complacency remains firmly intact.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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