Stock Market Outlook for June 20, 2023
Mean reversion among asset classes may provide an opportunity in two favour seasonal trades before the quarter comes to a close.
*** 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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Procter & Gamble Co. (NYSE:PG) Seasonal Chart
Carmax Inc. (NYSE:KMX) Seasonal Chart
Discover Financial Services (NYSE:DFS) Seasonal Chart
Healthpeak Properties Inc (NYSE:PEAK) Seasonal Chart
Pioneer High Income Trust (NYSE:PHT) Seasonal Chart
iShares MSCI India ETF (AMEX:INDA) Seasonal Chart
Note: Due to the US market closure on Monday as a result of the Juneteenth National Independence Day holiday, our next report will be released on Tuesday.
The Markets
Stocks closed slightly lower on Friday following a very strong week for equity markets that saw the first meaningful expansion of breadth in months. The S&P 500 Index closed lower by just less than four-tenths of one percent, retaining the short-term parabolic pattern that was derived following the breakout above resistance at 4200. The benchmark remains the most overbought according to the Relative Strength Index (RSI) since November of 2021 and, aside from Friday’s slight reversal, significant signs of buying exhaustion have yet to materialize. Support remains firm around major moving averages with the 20-day at 4261 and the 50-day at 4181. A pullback towards these hurdles prior to the start of the average summer rally period between the end of June and the middle of July would provide the ideal setup to increase risk (equity) exposure in portfolios, but the timeframe before the end of the month/quarter/first half of the year is narrowing rapidly.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Prospect of mean reversion in the bond market
- Commodities on our radar
- Analysts expecting an earnings rebound in the second half of the year following the earnings recession during the first half
- Canada Manufacturing Sales and the segment of the manufacturing economy that is holding up
- US Business Sales and Inventories
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Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.84.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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