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Stock Market Outlook for October 19, 2020


Stocks close flat amidst mixed reports on retail sales and industrial production for September.

 

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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Honeywell Intl (NYSE:HON) Seasonal Chart

Honeywell Intl (NYSE:HON) Seasonal Chart

PulteGroup, Inc. (NYSE:PHM) Seasonal Chart

PulteGroup, Inc. (NYSE:PHM) Seasonal Chart

Interpublic Grp Of Cos (NYSE:IPG) Seasonal Chart

Interpublic Grp Of Cos (NYSE:IPG) Seasonal Chart

PNC Financial Services Gr (NYSE:PNC) Seasonal Chart

PNC Financial Services Gr (NYSE:PNC) Seasonal Chart

Charles Schwab Corp. (NYSE:SCHW) Seasonal Chart

Charles Schwab Corp. (NYSE:SCHW) Seasonal Chart

Teradyne, Inc. (NASD:TER) Seasonal Chart

Teradyne, Inc. (NASD:TER) Seasonal Chart

Landstar System, Inc. (NASD:LSTR) Seasonal Chart

Landstar System, Inc. (NASD:LSTR) Seasonal Chart

Domtar, Inc. (TSE:UFS.TO) Seasonal Chart

Domtar, Inc. (TSE:UFS.TO) Seasonal Chart

Corby Spirit and Wine Limited (TSE:CSW/B.TO) Seasonal Chart

Corby Spirit and Wine Limited (TSE:CSW/B.TO) Seasonal Chart

Allison Transmission Holdings, Inc. (NYSE:ALSN) Seasonal Chart

Allison Transmission Holdings, Inc. (NYSE:ALSN) Seasonal Chart

Science Applications International Corp. (NYSE:SAIC) Seasonal Chart

Science Applications International Corp. (NYSE:SAIC) Seasonal Chart

FLIR Systems, Inc. (NASD:FLIR) Seasonal Chart

FLIR Systems, Inc. (NASD:FLIR) Seasonal Chart

F5 Networks, Inc. (NASD:FFIV) Seasonal Chart

F5 Networks, Inc. (NASD:FFIV) Seasonal Chart

Cree, Inc. (NASD:CREE) Seasonal Chart

Cree, Inc. (NASD:CREE) Seasonal Chart

Hawaiian Holdings, Inc. (NASD:HA) Seasonal Chart

Hawaiian Holdings, Inc. (NASD:HA) Seasonal Chart

InterActiveCorp (NASD:IAC) Seasonal Chart

InterActiveCorp (NASD:IAC) Seasonal Chart

iShares S&P Global Consumer Discretionary Index ETF (CAD-Hedged) (TSE:XCD.TO) Seasonal Chart

iShares S&P Global Consumer Discretionary Index ETF (CAD-Hedged) (TSE:XCD.TO) Seasonal Chart

 

 

The Markets

Stocks closed relatively flat on Friday despite a much stronger than expected report on retail sales for September.  The headline print of September’s report of retail trade in the US indicated that activity increased by 1.9% last month, which was much stronger than the 0.7% increase that was expected by analysts.  Less gas and autos, the increase was similarly upbeat at 1.5%, also much stronger than estimates that called for a rise of 0.4%.  Stripping out the adjustments, retail sales actually declined by 2.8% in September versus the month prior, much stronger than the 7.3% decline that is average for this back-to-school month.  The year-to-date change is now hovering 6.3% above the seasonal average trend.  The gap between the year-to-date change and the seasonal norm is now the widest of the year and is now the best performance through the first three quarters of the year on recordWe sent out further insight to subscribers intraday.  Signup now to be included on our distributions.

Retail Trade: Total Seasonal Chart

The S&P 500 Index was relatively unchanged on the day, unable to hold the momentum following Thursday’s reversal from an over 1% decline recorded just after the opening bell.  Support continues to be implied around 20 and 50-day moving averages, which are around 10-points away from charting a bullish crossover.  Resistance is implied around the all-time high of 3588, which has caused some indecision amongst market participants while earnings season progresses and the election nears.  Seasonally, equity markets typically hit a significant low during election years near the end of October before rebounding into the election itself.

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Dow Jones Industrial Average Election Year Seasonal Chart

Further on the economic front, September’s report on industrial production also gave something for investors to mull over during Friday’s session.  The headline print indicates that activity declined by 0.6% last month, which was a significant miss versus the consensus analyst estimate that called for a gain of 0.6%.  The manufacturing component reported a decline of 0.3%, which is nowhere near the 0.8% increase that was forecast.  Stripping out the seasonal adjustments, industrial production in the US actually declined by 2.7% in September, which is much weaker than the 1.1% decline that is average for the month.  The year-to-date change is now down by 7.3%, which is still firmly below the 2.3% increase that is average by this point in the year.  The last time the year-to-date change through the first three quarters was weaker was in 1945, at the tail end of the Second World War.  Further insight was sent to subscribers intraday, including whether or not any conclusions can be made of the unexpected decline in production.  Subscribe now.

Industrial Production: Total Seasonal Chart

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.85.

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Seasonal charts of companies reporting earnings today:

International Business Machines Corporation Seasonal Chart Koninklijke Philips N.V. Seasonal Chart Cadence Design Systems, Inc. Seasonal Chart PPG Industries, Inc. Seasonal Chart Logitech International S.A. Seasonal Chart Equity Lifestyle Properties, Inc. Seasonal Chart Halliburton Company Seasonal Chart Crown Holdings, Inc. Seasonal Chart Lennox International, Inc. Seasonal Chart Steel Dynamics, Inc. Seasonal Chart Zions Bancorporation N.A. Seasonal Chart Agree Realty Corporation Seasonal Chart Hexcel Corporation Seasonal Chart F.N.B. Corporation Seasonal Chart BancorpSouth Bank Seasonal Chart Old National Bancorp Seasonal Chart ServisFirst Bancshares, Inc. Seasonal Chart Simmons First National Corporation Seasonal Chart HNI Corporation Seasonal Chart Triumph Bancorp, Inc. Seasonal Chart Enterprise Financial Services Corporation Seasonal Chart Washington Trust Bancorp, Inc. Seasonal Chart Preferred Bank Seasonal Chart Guaranty Bancshares, Inc. Seasonal Chart

 

S&P 500 Index

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TSE Composite

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