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Stock Market Outlook for June 17, 2020


Stocks surge as retail sales return to levels that are more normal for this time of year.

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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Retail Opportunity Investmnt Corp. (NASD:ROIC) Seasonal Chart

Retail Opportunity Investmnt Corp. (NASD:ROIC) Seasonal Chart

China Telecom Corp. (NYSE:CHA) Seasonal Chart

China Telecom Corp. (NYSE:CHA) Seasonal Chart

Southern Missouri Bancorp, Inc. (NASD:SMBC) Seasonal Chart

Southern Missouri Bancorp, Inc. (NASD:SMBC) Seasonal Chart

Natus Medical, Inc. (NASD:NTUS) Seasonal Chart

Natus Medical, Inc. (NASD:NTUS) Seasonal Chart

BlackRock California Municipal Income Trust (NYSE:BFZ) Seasonal Chart

BlackRock California Municipal Income Trust (NYSE:BFZ) Seasonal Chart

Blackrock Long Term Municipal Advantage Trust (NYSE:BTA) Seasonal Chart

Blackrock Long Term Municipal Advantage Trust (NYSE:BTA) Seasonal Chart

Invesco California Value Municipal Income Trust (NYSE:VCV) Seasonal Chart

Invesco California Value Municipal Income Trust (NYSE:VCV) Seasonal Chart

 

The Markets

Stocks gained on Tuesday as investors expressed their enthusiasm regarding the Fed’s announcement that it would purchase individual corporate bonds.  The S&P 500 Index gained 1.90%, continuing to claw back some of last weeks loss that saw the benchmark fall back to levels around the 200-day moving average.  The benchmark closed just below horizontal resistance at 3130.  Momentum indicators remain on sell signals, despite the gains achieved in recent days.  Major moving averages remain in positions of support below, including the 200-day moving average at 3015.

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Helping the market performance on Tuesday was a stronger than expected report on retail trade in the US.  The headline print of May’s report indicated that activity surged by 17.7% last month, which was much stronger than the 7.5% increase that was expected by analysts. Less gas and autos, the increase was equally impressive, up 12.4%, which is more than three times the 4.0% increase that was forecasted by analysts. Stripping out the adjustments, retail sales actually increased by 21.9% versus the month prior. This is the strongest May increase on record, far surpassing the increase of 6.2% that is average for this time of year. The year-to-date change is now down by 12.0%, which is only a mere 2.8% below the seasonal average trend through the first five months of the year. This is the weakest year-to-date change since 2005. We sent out further insight to subscribers intraday.  Signup now.

Retail Trade: Total Seasonal Chart

Also released was May’s report on Industrial Production.   The headline print indicates that activity increased by 1.4% last month, which was less than half the consensus analyst estimate that called for an increase of 2.9%. The manufacturing component reported an increase of 3.8%, which was marginally better than the consensus analyst estimate that called for an increase of 3.6%. Stripping out the seasonal adjustments, industrial production in the US actually increased by 2.5% in May, which is stronger than the 0.6% increase that is average for the month. The year-to-date change is now down by 16.3%, which is the weakest performance through the first five months of the year on record. The average change through this time of year is an increase of 0.1%. We sent out further insight to subscribers intraday.  Subscribe now.

Industrial Production: Total Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.76.

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Seasonal charts of companies reporting earnings today:

ABM Industries Incorporated Seasonal Chart

 

S&P 500 Index

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TSE Composite

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