Equity Clock

Stock Market Outlook for October 9, 2020

Continued jobless claims fell sharply last week as the path towards normalization continues.

 

 

 

*** 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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Bank of New York Mellon Corp (NYSE:BK) Seasonal Chart

Huntington Bancshares Inc. (NASD:HBAN) Seasonal Chart

Synopsys, Inc. (NASD:SNPS) Seasonal Chart

WestRock Co. (NYSE:WRK) Seasonal Chart

Fulton Financial Corp. (NASD:FULT) Seasonal Chart

Caleres, Inc. (NYSE:CAL) Seasonal Chart

Hyatt Hotels Corp. (NYSE:H) Seasonal Chart

American Airlines Group Inc. (NASD:AAL) Seasonal Chart

Invesco Dynamic Market ETF (NYSE:PWC) Seasonal Chart

SPDR S&P Transportation ETF (NYSE:XTN) Seasonal Chart

Xilinx, Inc. (NASD:XLNX) Seasonal Chart

Chemed Corp. (NYSE:CHE) Seasonal Chart

ASML Holding NV (NASD:ASML) Seasonal Chart

Maxar Technologies Ltd. (TSE:MAXR.TO) Seasonal Chart

SPDR Dow Jones Industrial Average ETF (NYSE:DIA) Seasonal Chart

 

 

The Markets

**Editors note: Reports will be lighter than normal over the next few days as we observe Canadian Thanksgiving.  Regular reports will resume on Tuesday**

Markets continued to shake off concerns that a deal on another stimulus bill may not be achieved before the election.  The S&P 500 Index added eight-tenths of one percent, closing firmly above short-term resistance around 3425.  The 20-day moving average is starting to curl higher following September’s downturn, suggesting the resumption of a positive short-term trend.  The breakout of an approximately 115-point short-term trading range projects a target to around the all-time highs charted at the end of August.

Headlines before the bell did not deter investors from hitting the buy button through the Thursday session.  Initial Jobless Claims came in at 840,000, a slight decline from the previously revised 849,000 for the week prior.  Analysts were expecting a drop to 819,000.  Stripping out the seasonal adjustments, initial jobless claims actually increased by 5,312 to 804,307, marking the ninth straight week that the tally has held very close to the 800,000 threshold.  The year-to-date change has flat lined around 200% above the seasonal average trend as the path to normalization appears to have stalled.  Seasonally, initial claims tend to rise between now and the middle of January.

But, of course, it is the continued claims that are more important to us during and coming out of a recession.  Continued claims posted another sizeable decline, this time falling by 1.01 million.  The pace of declines on the continued claimant count has been accelerating, helping to close the still sizeable gap that persists between the year-to-date change and the seasonal norm.  At 10,612,021, continued jobless claims are still at an unprecedented level, recession or not.  The path toward normalization seems to be a long one, but  the improvement week after week is encouraging to suggest that the economy is on the right track and the same signs of stalling that are apparent in initial claims are not present here.  Seasonally, continued claims tend to rise through the fourth quarter.

On Thursday, our intraday report to subscribers pertained to vehicle sales in the US for the month of September and the investment implications that result.  Read more in our report, available to subscribers at the following link: https://charts.equityclock.com/featured/us-vehicle-sales-september-2020

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.80.

 

 

Seasonal charts of companies reporting earnings today:

• No significant earnings scheduled for today

 

 

S&P 500 Index

 

 

TSE Composite

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