Equity Clock

Stock Market Outlook for November 18, 2020

Retail sales in the US increased by 4.3% (NSA) in October, much stronger than the 3.2% increase that is average for this time of year.

 

 

 

*** 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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Superior Plus Corp. (TSE:SPB.TO) Seasonal Chart

Pilgrims Pride Corp. (NASD:PPC) Seasonal Chart

Regency Realty Corp. (NASD:REG) Seasonal Chart

Morningstar Inc. (NASD:MORN) Seasonal Chart

Himax Technologies Inc. (NASD:HIMX) Seasonal Chart

CGI Group, Inc. (NYSE:GIB) Seasonal Chart

Caesars Entertainment Corp. (NASD:CZR) Seasonal Chart

iShares MSCI Israel Capped ETF (NYSE:EIS) Seasonal Chart

iShares FactorSelect MSCI International ETF (AMEX:INTF) Seasonal Chart

ELEMENTS Rogers International Commodity Index – Agriculture Total Return ETN (NYSE:RJA) Seasonal Chart

 

 

The Markets

Stocks pulled back slightly on Tuesday as investors digested the gains from the past couple of sessions.  The S&P 500 Index closed lower by just less than half of one percent, continuing to maintain levels above the psychologically important 3600 level.  The breakout of the approximately 300-point range between 3200 and 3500 projects upside potential towards 3800, now 5.29% above present levels.  Short-term resistance can be pegged at the all-time intraday high of 3645.

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On the economic front, a report on retail sales in the US was released before Tuesday’s opening bell.  Headlines stated that retail trade increased by 0.3% last month, which was slightly weaker than the 0.4% increase that was expected by analysts.  Less gas and autos, the increase was even more muted at 0.2%, about a third of the increase that analysts were expecting of 0.6%.  Stripping out the adjustments, retail sales actually increased by 4.3% in October versus the month prior, stronger than the 3.2% increase that is average for this fall month.  The year-to-date change has expanded again to 8.2% above the seasonal average trend.  The result remains the best performance through this point in the year on record.  We broke down the state of the consumer economy in our intraday report to subscribers.  Signup now to access this report.

Further on the economic front, industrial production data for October was also released on Tuesday.  The headline print of October’s report indicates that activity increased by 1.1% last month, which was slightly stronger than the consensus analyst estimate that called for a gain of 1.0%.  The manufacturing component reported an increase of 1.0%, which was also marginally better than the 0.9% increase that was forecast.  Stripping out the seasonal adjustments, industrial production in the US actually increased by 1.1% in October, which is much stronger than the 0.7% decline that is average for the month.  The year-to-date change is now down by 5.7%, which is still firmly below the 1.7% increase that is average by this point in the year.  Previously, we had been indicating that the last time the year-to-date change was weaker was in 1945, at the tail end of the Second World War.  The year-to-date change has now improved enough to now be the weakest since 2008, just as the economy was falling into a recession.  We break down what this all means in our intraday report to subscribers.  Subscribe now.

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.87.  Looking at our gauge of institutional sentiment, the Dark Index closed at 44.1% on Tuesday, ticking higher from the prior day and resuming an upward tilt that has become apparent in recent weeks.  Historically, levels above 45% have indicated dark pool buying activity, typically conducive to strength in equity markets.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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