Equity Clock

Stock Market Outlook for November 5, 2020

While we have not seen a Republican controlled Senate along with a Democratic controlled House and Presidency in the past seven decades, a divided government is typically positive for stocks.

 

 

 

*** 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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AES Corp. (NYSE:AES) Seasonal Chart

TFI International Inc. (TSE:TFII.TO) Seasonal Chart

Hormel Foods Corp. (NYSE:HRL) Seasonal Chart

Unitedhealth Group, Inc. (NYSE:UNH) Seasonal Chart

Gildan Activewear, Inc. (TSE:GIL.TO) Seasonal Chart

Brink’s Co. (NYSE:BCO) Seasonal Chart

Corus Entertainment, Inc. (TSE:CJR/B.TO) Seasonal Chart

SeaWorld Entertainment, Inc. (NYSE:SEAS) Seasonal Chart

 

Upcoming Event:

Our event at the Money Show is fast approaching!  On November 6th at 2:00pm ET, we will be presenting at the Money Show’s Virtual Expo on the topic of “Using Seasonality to Invest During a Pandemic.”  Registration is free via the following link:

 

 

The Markets

Stocks surged on Wednesday as investors became encouraged of a Biden win, combined with the status quo with respect to the House and the Senate.  The composition is seen as favourable to keep the Trump tax cuts intact, while allowing for lawmakers to implement a significant stimulus bill to combat the economic headwinds resulting from the coronavirus.  The S&P 500 Index surged by 2.20%, moving back above resistance presented by 20 and 50-day moving averages that had converged around 3400.  Momentum indicators have begun to turn back higher, hinting that a renewed buy signal with respect to MACD may be imminent.  The trading range on the chart of the benchmark that we have been highlighting in recent weeks between 3200 and 3588 remains intact and it may take a catalyst more than the election to change this status quo.

On schedule for the Wednesday session, the Energy Information Administration (EIA) released its status of petroleum inventories in the US.  The  EIA reported that oil inventories declined by 8.0 million barrels last week, which was a divergence compared to the 890,000 barrel injection that was expected by analysts.  Gasoline stockpiles, meanwhile, increased by 1.5 million barrels.  The result saw the days of supply of oil tick lower by four-tenths of a day to 36.2, while gasoline days of supply ticked higher by six-tenths to 27.0.  The average days of supply for each at this point in October is 23.0 and 23.3, respectively.  We sent out further insight to subscribers intraday, including whether or not the unexpected decline in oil stockpiles was enough to change our Neutral view of the fundamentals surrounding energy commodities.  Subscribe now.

On the economic front, we received our first monthly data-point for October, providing insight as to how activity in the month shaped up.  The Bureau of Economic Analysis (BEA) has indicated that total vehicle sales in the US were unchanged last month at a seasonally adjusted annualized rate of 16.7 million.  Analysts were expecting a rate of 16.5 million.  Stripping out the seasonal adjustments, Total Vehicle Sales actually increased by 0.5% last month, which is stronger than the 1.0% decline that is average for October.  The year- to-date change is now just 1.9% below the seasonal average trend with just two months left in the year to report.  We sent out further insight to subscribers intraday.  Subscribe now to receive this and other reports relevant to aid in your seasonal investment decisions.

Sentiment on Wednesday, as gauged by the put-call ratio, ended close to neutral at 0.98.  The Dark Index, our gauge of institutional demand, actually fell to the lowest level in weeks at 39.5%.  A level of 45% or higher is indicative of buying demand.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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