Stock Market Outlook for July 20, 2023
The year-over-year change of Canadian CPI has fallen to the lowest level in over two years, but the favourable backdrop that allowed inflationary pressures to alleviate from last year’s high has come to an end.
*** 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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Stelco Inc. (TSE:STLC.TO) Seasonal Chart
Pipestone Energy Corp. (TSE:PIPE.TO) Seasonal Chart
NorthEast Community Bancorp Inc. (NASD:NECB) Seasonal Chart
FB Financial Corp. (NYSE:FBK) Seasonal Chart
ProShares UltraShort Semiconductors (NYSE:SSG) Seasonal Chart
iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:LQD) Seasonal Chart
PrairieSky Royalty Ltd. (TSE:PSK.TO) Seasonal Chart
Sunworks, Inc. (NASD:SUNW) Seasonal Chart
Cohu, Inc. (NASD:COHU) Seasonal Chart
Primerica Inc. (NYSE:PRI) Seasonal Chart
The Markets
Stocks continued to climb on Wednesday with the S&P 500 Index getting within arm’s reach of our proposed summer rally target of 4600. The large-cap benchmark closed with a gain of just less than a quarter of one percent, remaining supported by its rising 20-day moving average at 4435. The benchmark remains overbought according to the Relative Strength Index (RSI), but, aside from a hint of near-term buying exhaustion provided by Wednesday’s price action, signs of a peak have yet to be seen. Momentum indicators continue to show characteristics of a bullish trend above their middle lines, although an ongoing divergence of the direction of MACD versus the recent direction of price suggests that buying demand is starting to wane. This summer rally period that began in the last week of June has certainly been impressive, thus far, and we still must prepare for the next phase in the market, which is volatility through August and September.
Today, in our Market Outlook to subscribers, we discuss the following:
- Initial hint that investors may be thinking about becoming defensive
- US Housing Starts
- Canada Consumer Price Index (CPI)
- US Petroleum Status and the price of Oil
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.82.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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