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Stock Market Outlook for November 23, 2020


With increasing levels of restrictions being enacted during the prime holiday shopping season, are we going to see a derailment of economic activity from seasonal norms in a manner that was seen in the winter/spring?

 

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.   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 – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Zimmer Biomet Holdings, Inc. (NYSE:ZBH) Seasonal Chart

Oracle Corp. (NYSE:ORCL) Seasonal Chart

Sealed Air Corp New (NYSE:SEE) Seasonal Chart

Aberdeen International Inc (TSE:AAB.TO) Seasonal Chart

Acadia Pharmaceuticals Inc. (NASD:ACAD) Seasonal Chart

iShares MSCI Denmark Capped ETF (AMEX:EDEN) Seasonal Chart

Cognizant Technology Solutions Corp. (NASD:CTSH) Seasonal Chart

Cliffs Natural Resources Inc. (NYSE:CLF) Seasonal Chart

iShares MSCI Europe Financials ETF (NASD:EUFN) Seasonal Chart

First Trust Financials AlphaDEX Fund (NYSE:FXO) Seasonal Chart

 

 

The Markets

Stocks sold off on Friday as investors reacted to the rising level of coronavirus cases in the US and around the globe.  The S&P 500 Index shed seven-tenths of one percent, ending close to the lows of the session.  The benchmark continues to hold above previously broken trading range resistance that hovers around 3550.  Major moving averages at the 20 and 50-day moving averages are in positions of support at 3476 and 3427, respectively.  Momentum indicators continue to roll over with MACD converging on its signal line, threatening to produce another sell signal.

On the economic front, Statscan released its tally of retail sales in Canada for the month of September.  The headline print indicated that sales increased by 1.1% for the month, much stronger than the consensus analyst estimate that called for no change.  The year-over-year change now sits at +4.6%, also much stronger than the rate analysts were expecting of +3.5%.  Stripping out the seasonal adjustments, retail sales in Canada actually increased by 0.1%, which is much stronger than the 4.2% decline that is average for this back-to-school month.  The year-to-date change now sits higher by 1.5%, which is 10.8% above the seasonal average trend through the first three quarters.  This is the first time on record that retail sales in this country have shown an increase through the first three quarters of the year, ahead of the critical end-of-year spending season.  Subscribers can login to the database to view all of the seasonal charts for the Canadian retail trade report at https://charts.equityclock.com/canada-retail-trade-sales.

In our Market Outlook to subscribers, we address the question of whether we are seeing or going to see a derailment of economic activity from seasonal norms as a result of increasing restrictions being imposed to combat the spread of the coronavirus.  As well, we look at some indicators that would suggest increasing strains in the system that would lead to another meltdown in risk assets (eg. stocks), such as what we saw in the first quarter.  Subscribe now.

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.71.  This is the lowest level since the middle of October, just before the pullback in the broader market through month-end.  As investors increasingly let down their guard in risk assets and adopt an upside bias via call options, the market becomes vulnerable as a result.  As for our gauge of institutional sentiment, the Dark Index, an indication of dark pool buying activity, showed a slight downtick to 43.8% on Friday, from 43.9% in the day prior.  Generally, levels 45% or higher indicate institutional buying demand. 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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