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Stock Market Outlook for November 20, 2015

 

S&P 500 Index has gained 68% of the time during the US Thanksgiving week, averaging a return of 0.72%.

 

Real Time Economic Calendar provided by Investing.com.

 

**NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates.   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:

Teekay Tankers Ltd. (NYSE:TNK) Seasonal Chart

EnCana Corporation (TSE:ECA) Seasonal Chart

Oshkosh Corporation (NYSE:OSK) Seasonal Chart

ONEX Corporation (TSE:OCX) Seasonal Chart

Northern Trust Corporation (NASDAQ:NTRS) Seasonal Chart

Leucadia National Corp. (NYSE:LUK) Seasonal Chart

Jacobs Engineering Group Inc. (NYSE:JEC) Seasonal Chart

AK Steel Holding Corporation (NYSE:AKS) Seasonal Chart

 

The Markets

Stocks ended around the flat-line on Thursday as investors took a breather following Wednesday’s rally.  The S&P 500 Index ended lower by 0.11%, dragged down by the healthcare sector following a profit warning from UnitedHealth (UNH).  Shares of UNH fell 5.65%, trading back to support around $110.  The negative momentum suggests a downside break may be imminent.  Seasonally, healthcare providers, including UnitedHealth, typically gain through the end of the year; November and December have seen average gains of over 4% with a success rate of over 80%, based on data from the past 20 years.  Clearly, the technicals have something else in mind.  The sector has been underperforming the market since mid-September, succumbing to the strain imposed by the broader sector following the scrutiny surrounding the pricing practices of a number of companies in this space.  The question now becomes, can major benchmarks, such as the S&P 500 Index, breakout to new highs without this previous darling of the market?  Health Care is the third largest sector of the S&P 500 Index, representing a weight of 14.67%.  Until the scrutiny fades, best to underweight the sector.

Next week is Thanksgiving in the US and investors should take note of the equity market tendencies during this period.  With less activity surrounding the Thanksgiving holiday on Thursday, stocks have a tendency of drifting higher.  For the week itself, the S&P 500 index has gained 67.7% of the time since 1950, averaging a gain of 0.72%.  The bulk of those gains come during the two days that bookend the holiday Thursday.  Gains on the Wednesday and Friday have been realized 78.5% and 72.3% of the time, respectively, averaging gains each day around 0.35%.  Happy Thanksgiving indeed.

 

S&P 500 Index Returns around the US Thanksgiving
Year Thanksgiving Week Wednesday before Thanksgiving Friday after Thanksgiving
2014 0.20% 0.28% -0.25%
2013 0.06% 0.25% -0.08%
2012 3.62% 0.23% 1.30%
2011 -4.69% -2.21% -0.27%
2010 -0.86% 1.49% -0.75%
2009 0.01% 0.45% -1.72%
2008 12.03% 3.53% 0.96%
2007 -1.24% -1.59% 1.69%
2006 -0.02% 0.23% -0.37%
2005 1.60% 0.35% 0.21%
2004 1.05% 0.41% 0.08%
2003 2.21% 0.43% -0.02%
2002 0.62% 2.80% -0.27%
2001 1.03% -0.49% 1.17%
2000 -1.90% -1.85% 1.47%
1999 -0.38% 0.89% -0.03%
1998 2.47% 0.33% 0.46%
1997 -0.80% 0.09% 0.40%
1996 1.11% -0.13% 0.27%
1995 -0.02% -0.31% 0.26%
1994 -1.99% -0.04% 0.52%
1993 0.10% 0.29% 0.15%
1992 0.82% 0.37% 0.23%
1991 -0.24% -0.37% -0.35%
1990 -0.64% 0.23% -0.29%
1989 0.69% 0.68% 0.60%
1988 0.29% 0.67% -0.66%
1987 -0.69% -0.93% -1.54%
1986 1.37% 0.24% 0.18%
1985 0.32% 0.93% -0.18%
1984 1.72% 0.20% 1.46%
1983 1.27% 0.07% 0.13%
1982 -1.56% 0.71% 0.75%
1981 2.78% 0.44% 0.84%
1980 1.01% 0.60% 0.25%
1979 0.85% 0.19% 0.75%
1978 1.45% 0.49% 0.32%
1977 1.43% 0.42% 0.21%
1976 1.21% 0.44% 0.72%
1975 1.91% 0.25% 0.33%
1974 1.55% 0.68% 0.04%
1973 -4.27% 1.11% -0.32%
1972 1.54% 0.59% 0.32%
1971 0.36% 0.19% 1.78%
1970 2.64% 0.37% 0.99%
1969 -0.54% 0.36% 0.58%
1968 1.95% 0.47% 0.57%
1967 1.16% 0.59% 0.27%
1966 -0.50% 0.68% 0.80%
1965 -0.23% 0.17% 0.10%
1964 -1.30% -0.34% -0.33%
1963 5.20% -0.18% 1.36%
1962 2.29% 0.60% 1.20%
1961 0.31% -0.11% 0.20%
1960 0.56% 0.14% 0.59%
1959 1.28% 0.16% 0.45%
1958 -0.42% 1.72% 1.12%
1957 2.08% 2.89% 1.14%
1956 -1.31% -0.49% 1.05%
1955 0.31% 0.13% -0.09%
1954 3.29% 0.56% 0.96%
1953 0.90% 0.08% 0.57%
1952 1.54% 0.63% 0.55%
1951 -1.84% -0.18% -1.06%
1950 2.32% 1.41% 0.79%
Average 0.72% 0.36% 0.35%
Gain Frequency 67.69% 78.46% 72.31%

 

And finally for today, on the economic front, another report on manufacturing was released, this time for the Philadelphia Federal Reserve District.  The General Business Conditions Index ticked higher to 1.9, marginally beating expectations calling for a flat (0.0) result.  Stripping out seasonal adjustments, the index plunged to –14.5, down from –4.1 previous.  The average reading for this time of year is –1.8.  November’s read is just slightly below the average level for December (-12.0), which typically marks the lows for the year.  Overall, manufacturing appears set to close out the year on a weak note, constrained by weak commodity prices and lacklustre export demand.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.95.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite