At this point of year, manufacturer inventories should be reaching a high as businesses stockpile for the end-of-year buying season, but businesses have been unable to build the supply necessary to meet demand.

Stock Market Outlook for December 7, 2020

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.Â Â 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:

Subscribers â€“ Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Precision Drilling Corp. (TSE:PD.TO) Seasonal Chart

Nabors Industries, Inc. (NYSE:NBR) Seasonal Chart

BCE, Inc. (TSE:BCE.TO) Seasonal Chart

Major Drilling Group Intl, Inc. (TSE:MDI.TO) Seasonal Chart

Canadian Utilities Ltd. (TSE:CU.TO) Seasonal Chart

Semafo, Inc. (TSE:SMF.TO) Seasonal Chart

AltaGas Income Ltd. (TSE:ALA.TO) Seasonal Chart

IDEXX Laboratories, Inc. (NASD:IDXX) Seasonal Chart

First Asset Canadian REIT ETF (TSE:RIT.TO) Seasonal Chart

Smart Real Estate Investment Trust (TSE:SRU/UN.TO) Seasonal Chart

Holly Energy Partners LP (NYSE:HEP) Seasonal Chart

A&W Revenue Royalties Income Fund (TSE:AW/UN.TO) Seasonal Chart

iShares Europe ETF (NYSE:IEV) Seasonal Chart

VanEck Vectors Uranium+Nuclear Energy ETF (NYSE:NLR) Seasonal Chart

Nuveen S&P 500 Dynamic Overwrite Fund (NYSE:SPXX) Seasonal Chart

CCL Industries, Inc. (TSE:CCL-A.TO) Seasonal Chart

Quebecor, Inc. (TSE:QBR/B.TO) Seasonal Chart

Finning Intl, Inc. (TSE:FTT.TO) Seasonal Chart

Ensign Energy Services, Inc. (TSE:ESI.TO) Seasonal Chart

Kelt Exploration Ltd. (TSE:KEL.TO) Seasonal Chart

Invesco S&P 500 Equal Weight Health Care ETF (NYSE:RYH) Seasonal Chart

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The Markets

Stocks climbed on Friday, despite the release of a weaker than expected read of employment for the month of November.Â The Bureau of Labor Statistics indicates that 245,000 payrolls were added in the US last month, which was much weaker than the consensus analyst estimate that called for an increase of 500,000.Â The unemployment rate continued to decline from 6.9% to 6.7%, levels that are typical coming out of an economic recession.Â Average hourly earnings, meanwhile, increased by 0.3%, which is stronger than the 0.1% increase that was forecast.Â Stripping out the seasonal adjustments, payrolls actually increased by 517,000, or 0.4%, in November, which is twice as strong as the 0.2% increase that is average for this time of year.Â The year- to-date change is now down by 5.8%, or 6.8% below the seasonal average trend through the first eleven months of the year.Â This is still the weakest performance through this point in the year since 1945, amidst the end of the Second World War.Â We sent out further insight to subscribers intraday, detailing what is driving the results into the end of the year and what to expect at the start of next year, including how we want to be exposed to risk assets (stocks) depending on the trends.Â Subscribe now.

The S&P 500 Index closed Fridayâ€™s session with a gain of nine-tenths of one percent, achieving yet another record high.Â The large-cap benchmark is now just a mere 100-points from our target of 3800, the calculated upside projection following the breakout of the trading range between 3200 and 3500.Â Momentum indicators continue to maintain an upward tilt, but the grind in recent days has not allowed momentum indicators like MACD to expand to suggest increasing buying demand.Â The grind is indicative of bearish capitulation as those that has accumulated/held bearish bets around the US election are forced to unwind those allocations.Â Institutions are not showing indications of putting new money to work, rather they are just rotating/right siding their portfolios to better align with the market dynamics that are pushing back against their previously bearish thesis.Â The grind can continue so long as bearish bets continue to be squeezed, and December is the logical month to realize this as the end of the quarter/end of the year nears.Â This tendency also makes stocks vulnerable the more that portfolio hedges are eliminated and investment managers become prone to selling should a shock event be realized.Â The market is pricing in a smooth and efficient roll-out of a vaccine and any headlines that suggest the contrary, such as headlines from Pfizer on Thursday’ evening suggesting a scaled back vaccine rollout, the selloff in equities would be swift.Â We choose to avoid speculating and just play the data that is in front of us, which has been bullish since the spring.

North of the border, Statscan dropped an employment report of their own.Â The statistics agency indicates that employment in Canada increased by 62,100 in November, which was much stronger than the consensus analyst estimate that called for a rise of 20,000.Â The unemployment rate ticked lower from 8.9% to 8.5% last month.Â Analysts had expected the unemployment rate to remain unchanged.Â Stripping out the seasonal adjustments, which are irrelevant in this environment, employment actually declined by 19,800, or 0.1%, in November.Â The average change for the month is a decline of 0.3%.Â Year-to-date, employment is down by 2.5%, representing the weakest pace since 1982.Â The average change through the end of November is an increase of 1.8%.Â We sent out further insight to subscribers, including areas of the market to be exposed to in order to take advantage of the fundamental trends that are playing out in the economy.Â Subscribe now.

Today, in our Market Outlook for subscribers, we discuss the following:

Weekly look at the S&P 500 Index and the influences to expect over the next few weeks

Areas of the market that warrant exposure within investment portfolios in order to benefit from ongoing fundamental trends

Factory Orders for October

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Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.68.Â As for our gauge of institutional sentiment, the dark index, a gauge of dark pool activity, closed at 40.4%.Â Typically, levels 45% or higher are indicative of dark pool buying demand.Â As highlighted, institutions do not appear to be putting new money to work, a risk to the market if the rotation/bearish capitulation fades.