Equity Clock

Stock Market Outlook for July 6, 2021

The strength in the labor market continues, but the reason that equity investors are cheering the result has little to do with the actual number of jobs created last month.

 

 

 

*** 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.

Rogers Communications, Inc. (TSE:RCI/A.TO) Seasonal Chart

QUALCOMM Inc. (NASD:QCOM) Seasonal Chart

Gamestop Corp. (NYSE:GME) Seasonal Chart

Arbutus Biopharma Corp. (NASD:ABUS) Seasonal Chart

Callinex Mines Inc. (TSXV:CNX.V) Seasonal Chart

Armour Residential REIT Inc. (NYSE:ARR) Seasonal Chart

Qorvo, Inc. (NASD:QRVO) Seasonal Chart

First Trust Mega Cap AlphaDEX Fund (NASD:FMK) Seasonal Chart

Western Asset Municipal Defined Opportunity Trust Inc. (NYSE:MTT) Seasonal Chart

 

Note: With markets in the US closed on Monday to observe the Independence Day holiday, our next Market Outlook will be released on Tuesday.

 

The Markets

Stocks jumped following the release of a strong payroll report for the month of June.  The Bureau of Labor Statistics indicates that 850,000 payrolls were added last month, which was much stronger than consensus analyst estimate that called for a rise of 703,000.  The unemployment rate ticked higher to 5.9% from 5.8% previous and average hourly earnings increased by 0.3%, just short of the 0.4% increase that was forecasted.  Stripping out the seasonal adjustments, payrolls actually increased by 1.148 million, or 0.8%, in June, which is firmly better than the 0.5% increase that is average for this sixth month of the year.  The year-to-date change continues to hold an above average pace and is now higher by 2.0% through the first half of the year.  The average change in payrolls through this point in the year is an increase of a mere 0.5%.  We sent out further insight to subscribers intraday.

The S&P 500 Index gained three-quarters of one percent to advance to another record closing high.  Momentum indicators continue to push higher with the Relative Strength Index reaching into overbought territory following the advance higher in recent days attributed to the summer rally period.  The benchmark is now around 50-points away from the upper limit to the approximately 200-point trading range that currently spans between 4200 and 4400.  This remains a market that is on a trend of higher-highs and higher-lows.

Today, in our Market Outlook to subscribers, we discuss the following:

• The strength in Leisure/Hospitality employment and how to gain exposure within the equity market
• Technology manufacturing employment
• Wages and the relief presented by last month’s decline on inflationary pressures
• Treasury bonds

Subscribe now and we’ll send this outlook to you.

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.78.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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