Stock Market Outlook for November 2, 2022
A sharp falloff in hires in September’s Job Openings and Labor Turnover report is presenting a skewed look at the state of demand for labor heading into the fall.
*** 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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iShares Morningstar Small-Cap Growth ETF (NYSE:ISCG) Seasonal Chart
Vanguard S&P Small-Cap 600 ETF (NYSE:VIOO) Seasonal Chart
AMC Networks Inc. (NASD:AMCX) Seasonal Chart
Pizza Pizza Royalty Corp. (TSE:PZA.TO) Seasonal Chart
Uranium Energy Corp. (AMEX:UEC) Seasonal Chart
Winnebago Industries Inc. (NYSE:WGO) Seasonal Chart
Penn National Gaming, Inc. (NASD:PENN) Seasonal Chart
The Markets
Stocks gave up early gains on Tuesday as a hotter than expected report of Job Openings left investors cautious that the Fed may have the leeway to maintain its aggressive tightening path over a longer-term timeframe. The S&P 500 Index closed lower by just over four-tenths of one percent, continuing to react to declining resistance at the 100-day moving average. Support continues to be pegged at the now rising 20-day moving average at 3731. The candlestick pattern on the day resembles an outside reversal, albeit not conclusive, providing indication of near-term upside exhaustion and hinting of a retracement lower in the near-term before we move higher. Of course, this is just speculation as Wednesday is the all important FOMC event that will likely see another rise in the Fed’s key lending rate by 75 basis points to a range of 3.75% to 4.00%. Reaction to this event is quite simply a gamble and investors will be seeking clues as to the path of rate increases moving forward. Any signs that the Fed is destined to slow its path of rate hikes as it allows its actions to filter through the economy would be perceived as a near-term positive for the market as this headwind on the trajectory of stocks is alleviated. We, along with the rest of the market, have certainly been shocked by the Fed’s forecasts for the overnight rate at recent meetings given the degradation in the economic fundamentals that persist, but there still remains a good chance that stocks will remain supported through the end of the year before the bottom falls out of the market, coinciding with the start of a recession. Momentum indicators on the daily chart of the market benchmark are showing early signs of peaking as the market becomes near-term top heavy, therefore investors will be looking for anything from the Fed event to place the short-term trend into extra innings before our anticipated short-term pullback through the middle of November.
Today, in our Market Outlook to subscribers, we discuss the following:
- Corporate bonds
- Job Openings and Labor Turnover Survey (JOLTS)
- US Construction Spending and construction stocks
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Sentiment on Tuesday, as gauged by the put-call ratio, ended neutral at 0.95.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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