Economic data showing signs of waning strength. 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: Spectrum Brands Inc. (NYSE:SPB) Seasonal Chart Interfor (TSE:IFP) Seasonal Chart Cogeco Cable Inc. (TSE:CCA) Seasonal Chart Churchill Downs, Inc. (NASDAQ:CHDN) Seasonal Chart Global Ship Lease, Inc. (NYSE:GSL) Seasonal Chart Teck Resources Limited (TSE:TCK-b) Seasonal Chart Just Energy Group (TSE:JE) Seasonal Chart First Quantum Minerals Limited (TSE:FM) Seasonal Chart Guess?, Inc. (NYSE:GES) Seasonal Chart UnitedHealth Group Inc. (NYSE:UNH) Seasonal Chart Potash Corp./Saskatchewan Inc. (TSE:POT) Seasonal Chart The Brink’s Company (NYSE:BCO) Seasonal Chart The Markets Stocks closed lower for a second day, pressuring the S&P 500 Index below its 20-day moving average for the first time since August. Momentum indicators are pointing lower as the large-cap benchmark seems poised to test support at its 50-day moving average around 2542. A few more days remain in this weak period within the month of November, after which the holiday period surrounding the US Thanksgiving has historically had a positive bias. On the economic front, the monthly look at the state of the consumer was released with October’s retail sales. The headline print indicated that sales rose by 0.2%, edging out the consensus forecast calling for a 0.1% increase. Less gas and autos, the increase was slightly better at 0.3%, a miss versus the analyst estimate of 0.4%. Stripping out the seasonal adjustments, total retail trade actually increased by 0.9%, which is well short of the 3.1% rise for this first month of the crucial fourth quarter spending period. Year-to-date, retail trade is running seven-tenths of a percent below the seasonal average trend, dragged lower by depressed auto and restaurant sales. Surprisingly, non-store retailers, which would include e-commerce, is also lagging seasonal averages, but this is less of a concern as consumers feel more comfortable making purchases online closer to the Christmas holiday. Previously, the non-store segment would start to realize its holiday boost in October as consumers leave plenty of time for those packages to make their way to homes in time to put under the Christmas tree. This has shifted in recent years are cyber Monday becomes all the rage in the month of November. Non-store retailers are expected to post above average results by the end of the calendar year. Across the remaining categories, weakness was fairly broad with most segments showing below average results for October. Perhaps most notable is the waning strength in the areas that relate to the home, such as building materials and furnishings. Furniture store sales recorded an abnormal decline in the month as demand fades going into the winter season. Purchases for the home had been supporting retail sales in the front half of the year with consumers upgrading their living spaces rather than moving in a tight real estate market. However, now that the renovation season is over, so too is the strength. For the retail industry, the back half of the year tends to focus more on the things that go under the tree rather than around the home, but strength in these material possessions this year is questionable given the increasing trend of consumers becoming experience focussed. Restaurant sales, perhaps the most discretionary item of the report, continues to show a year-to-date trend that is among the weakest in the history of the report. This raises concerns that consumers may be reluctant to open their wallets this Christmas season, instead focusing on a select few desired items, such as the new Apple iPhone. In the coming week, we should receive further clues as to how willing consumers are to spend this holiday season when the Black Friday and Cyber Monday sales are tallied. Retail sales rise, on average, by 1.7% and 17.4% in November and December. Retail Trade: Total Seasonal Chart In other economic news, the latest consumer inflation gauges were fairly stable in October. The headline print indicated that the consumer price index rose by 0.1% last month, keeping the year-over-year change at 2.0%. Less food and energy, CPI was higher by 0.2%, helping to support the year-over-year change to a 1.8% gain. Stripping out the seasonal adjustments, CPI for all urban consumers was actually lower by 0.1%, stalling following the above average gain recorded in September. On average, CPI is typically unchanged in October. The year-to-date change in this consumer inflation gauge is higher by 2.2%, short of the average change of 2.6% by this point in the year. The trend in CPI ex food and energy also remains below average, higher by 1.8% through October. The results continue to give the Fed leeway in their policy actions as inflation is neither hot nor cold. It still remains unclear, however, what will put inflation gauges back on a sustained path above 2%, the fed’s implied target. Consumer Price Index for All Urban Consumers: All Items Seasonal Chart While the consumer price index may be lagging its seasonal average trend, producer price indices remain on an above average path, helped by the resurgence in manufacturing activity this year. Well, if the Empire Fed Survey is any gauge of the broader manufacturing activity in the US, strength may be slowing. The headline print indicated that the gauge of general business conditions in the New York region fell to +19.4 from +30.2 previous. The consensus forecast was for a print of +26.0. Stripping out the seasonal adjustments, the actual level of the index was +3.1, falling from +22.7 previous. The average level for this time of year is –3.5. While remaining above average, the gap versus the seasonal average trend is narrowing as the manufacturing surge reaches its one-year anniversary. Seasonally, manufacturing tends to wane into the winter as activity winds down following the strength in the front half of the year. And while strength in manufacturing activity shows signs of waning, a report on business inventories shows signs that manufacturers’ inventories are rising at an above average pace through the first three quarters of the year. Manufacturing inventories are higher by 5.3% through September, about one percent above average. Combined with a below average pace in sales, manufacturers may be faced with pricing pressures down the road should they need to de-stock. September and October are typically the peak period of the year for sales and inventories prior to goods being shipped out to retailers and wholesalers for end of year purchases. While further evidence is required, data suggests that the peak in manufacturing activity may have past. Total Business Sales Seasonal Chart Total Business Inventories Seasonal Chart On to the weekly look at petroleum inventories in the US, the EIA is indicating that oil stockpiles expanded by 1.9 million barrels last week, while gasoline recorded a build of 900,000 barrels. The change in inventories of both crude oil and gasoline continue to run below average year-to-date, on track to record one of the largest calendar year drawdowns on record. Not helping the inventory levels of either commodity is the continued pressure from domestic producers, who are supplying the highest level of oil on record at 9.65 million barrels per day. Despite two large blips related to hurricane disruptions and volatile oil prices throughout the year, producers have continued to increase their output, threatening another glut situation at a time when supplies attempt to stabilize. Stockpiles of oil are hovering around the lows charted prior to the hurricanes that hit the US in September. Seasonally, oil inventories tend to decline between mid-November and the end of the year as refiners get back up to speed following their maintenance period, thereby increasing the stockpiles of the refined product over the same timeframe. Weekly U.S. Days of Supply of Crude Oil excluding SPR (Number of Days) Seasonal Chart Weekly U.S. Days of Supply of Total Gasoline (Number of Days) Seasonal Chart The price of oil closed lower following the report, retesting broken resistance around $55. Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.04. Seasonal charts of companies reporting earnings today: S&P 500 Index TSE Composite