Some of the cheapest stocks in the market with fundamental tailwinds behind them are moving above significant horizontal support.

Stock Market Outlook for February 1, 2023

Some of the cheapest stocks in the market with fundamental tailwinds behind them are moving above significant horizontal support.

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:

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Allstate Corp. (NYSE:ALL) Seasonal Chart

WW Grainger, Inc. (NYSE:GWW) Seasonal Chart

Progressive Corp. (NYSE:PGR) Seasonal Chart

1-800 FLOWERS.COM, Inc. (NASD:FLWS) Seasonal Chart

Ero Copper Corporation (TSE:ERO.TO) Seasonal Chart

The Markets

Stocks gained to close out the month of January as investors continue to neutralize negative bets ahead of month-end reporting, the upcoming FOMC announcement, and the ongoing release of earnings reports. The S&P 500 Index ended higher by 1.46%, erasing the loss that was realized to start the week. The large-cap benchmark remains above former declining trendline resistance, but below the highs set in the month of December at 4100, presenting a critical line in the sand that is keeping the path of lower-highs on an intermediate to long-term basis intact. Momentum indicators continue to show early signs of rolling over with the MACD histogram increasingly narrowing back towards 0. The technical framework to the market continues to give bias to a neutral view and we are waiting for the trend to evolve to suggest either and bullish of bearish mentality for the months ahead.

For the month ahead, the S&P 500 Index has averaged an unchanged (0.0%) result in February over the past two decades, however, 60% of the periods have shown a positive outcome. Returns have ranged from a loss of 11.0% in February of 2009 to a gain of 5.5% in February of 2015. The softer period for equity market performance concludes around the start of March before the spring uptick in prices attributed to Investment Retirement Account (IRA) contributions begins. We break down everything to look for in the month ahead in our just released monthly report for February. Subscribe now. S&P 500 Index Seasonal Chart

Just Released…
Our 92-page monthly report for February is out, providing everything that you need to know for the month(s) ahead. Highlights in this report include:

Equity market tendencies in the month of February

Investors not upbeat about the year ahead

Using the Yield Curve as a coincident indicator to a recessionary market decline

Analysts are too optimistic and this is good news for the bond market

Credit spreads providing indication of alleviating strains, but a recession would certainly change that

The ultimate coincident indication of economic activity: Jobless Claims

Market versus the Fed

Consumer has definitively cashed out

Existing Home Sales

Manufacturers not optimistic either

Tightening lending standards

Not helping industrials is the downfall of the shipping economy

Inflationary pressures remain an ongoing concern and could re-flare through the months ahead

Forecasted general direction of stocks in 2023

Dow Jones Industrial Average and NYSE Composite back to the 2022 breakdown points

Sustainability of this year’s strength of domestic equities in question

Dollar remains key to the market

Bonds

Lower yields versus a stronger dollar

If you can’t find any love at home, go elsewhere

Strength in International equities correlates well with strength in Gold

Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs

Positioning for the months ahead

Sector Reviews and Ratings

Stocks that have Frequently Gained in the Month of February

Notable Stocks and ETFs Entering their Period of Strength in February

Subscribers can look for this report in their inbox. Not subscribed yet? Signup now to receive this and other reports that we publish on either a daily or monthly basis, providing insight on how to position your portfolio according to our three pronged approach.

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

Monthly look at the large-cap benchmark

US Home Prices

Canada Gross Domestic Product and some of the cheapest stocks in the market with fundamental tailwinds behind them

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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.91.