Equity Clock

Stock Market Outlook for August 27, 2020

Gasoline demand reached the highest level of the recovery last week as end-of-summer driving activity helps to alleviate bloated stockpile levels.

 

 

 

*** 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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FedEx Corp. (NYSE:FDX) Seasonal Chart

Delta Air Lines Inc. (NYSE:DAL) Seasonal Chart

L Brands, Inc. (NYSE:LB) Seasonal Chart

Signet Jewelers Ltd. (NYSE:SIG) Seasonal Chart

LogMeIn Inc. (NASD:LOGM) Seasonal Chart

Dine Brands Global, Inc. (NYSE:DIN) Seasonal Chart

Hope Bancorp, Inc. (NASD:HOPE) Seasonal Chart

LHC Group Inc. (NASD:LHCG) Seasonal Chart

WesBanco, Inc. (NASD:WSBC) Seasonal Chart

Matson, Inc. (NYSE:MATX) Seasonal Chart

County Bancorp, Inc. (NASD:ICBK) Seasonal Chart

 

 

The Markets

Stocks climbed again on Wednesday as strong earnings from Salesforce.com had investors adding more to their technology holdings.  The S&P 500 Index closed with a gain of 1.02%, quickly closing in on our proposed target of 3550.  The benchmark is now just 2% off of this threshold having gained just over 2.7% since surpassing the previous all-time closing high around 3386 within the past week.  With the Relative Strength Index (RSI) at 76.81, the benchmark is now the most overbought since the end of December.  Volume continues to wane, but this is not preventing the market benchmark from attracting the next marginal buyer as market participants let down their guard, selling bonds and buying stocks.

On schedule for the Wednesday session, the Energy Information Administration (EIA) released its tally of petroleum inventories for the week just past.  The EIA reported on Wednesday that oil inventories declined by 4.7 million barrels last week, which is better than the drawdown that analysts were expecting of 3.7 million.  Gasoline stockpiles, meanwhile, declined by 4.6 million barrels.  The result saw the days of supply of oil fall by four-tenths of a day to 34.7, while gasoline days of supply ticked lower by eight-tenths to 27.1.  The average days of supply for each at this point in August is 21.8 and 23.1, respectively.  We sent out further insight to subscribers intraday.  Subscribe now to view our report in the archive.

On the economic front, a report on durable goods orders in the US was released before Wednesday’s opening bell.  The headline print of July’s report indicated that new orders in the US increased by 11.2% last month, which was stronger than the consensus analyst estimate that called for an increase of 4.3%.  Core capital goods orders, meanwhile, showed an increase of 1.9%, which was slightly stronger than the consensus analyst estimate that called for an increase of 1.7%.  Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually declined by 4.2% in July, which is much stronger than the 15.6% decline that is average for this time of year.  The year-to-date change is now hovering 0.7% above the seasonal average trend.  We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.65.

 

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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