Equity Clock

Stock Market Outlook for July 31, 2020

Continued jobless claims pointing to a stalling of the economic rebound.

 

 

*** 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.

Myriad Genetics, Inc. (NASD:MYGN) Seasonal Chart

Polo Ralph Lauren Corp. (NYSE:RL) Seasonal Chart

Bottomline Technologies, Inc. (NASD:EPAY) Seasonal Chart

Carnival Corp. (NYSE:CCL) Seasonal Chart

Parker Hannifin Corp. (NYSE:PH) Seasonal Chart

Mettler Toledo Intl, Inc. (NYSE:MTD) Seasonal Chart

Everest Re Group, Ltd. (NYSE:RE) Seasonal Chart

VanEck Vectors Russia Small Cap ETF (NYSE:RSXJ) Seasonal Chart

 

 

The Markets

Stocks closed slightly lower on Thursday as investors braced for the onslaught of technology earnings that were slated to be released after the closing bell.  The S&P 500 Index shed nearly four-tenths of one percent, shaking off a decline of over 1.6% at the low of the session.  The benchmark had initially sold off following the release of Gross Domestic Product (GDP) figures, which showed that the economy contracted by 32.9% in the second quarter.  A weaker than expected report on jobless claims didn’t help.  The headline print indicated that initial claims ticked higher from 1.422 million to 1.434 million.  Analysts were expecting a decline to 1.388 million.  Stripping out the seasonal adjustments, which are irrelevant in this environment, initial claims actually fell by 171,054 from the week prior to 1.206 million.  This is a new recovery low and places the year-to-date increase at 286%.  But our focus is on continued claims given that is a more valuable indicator coming out of a recession.  This tally actually increased last week from 16.345 million to 16.881 million.  The year-to-date increase is now 686%, nowhere near seasonal norms for this time of year.  The improvement in the continued claimant count from a peak in May has shown signs of stalling in recent weeks, essentially holding around 16.5 to 17.5 million over the past month.  Seasonally, continued claims tend to decline between the middle of July and the start of October.  Confirmation of the stalled trend of declines would be a divergence from seasonal norms, which would raise our concerns pertaining to the economic rebound.

Just Released…

Our monthly outlook for August will be emailed to subscribers on Friday morning.

Highlights in this report include:

• Equity market tendencies in the month of August
• Early indicators pointing to a stalling of the economic rebound
• Sentiment indicators at levels typically seen around market peaks
• Presidential election influence on investments
• Perhaps a bigger risk than the election this fall
• Divergence from seasonal norms with regards to respiratory illnesses
• What’s next in the seasonal rotation
• This year’s trade in natural gas
• The technical status of the S&P 500 Index
• Sustainability of the bull market rally
• Shifting risk sentiment in the equity market
• Sector reviews and ratings
• Notable stocks and ETFs entering their period of strength in August

Please check your spam or bulk folders should this distribution inadvertently be re-routed.  Not subscribed yet?  Subscribe here to receive a copy of this 77-page report that outlines how you should position your portfolio for the month(s) ahead: https://charts.equityclock.com/subscribe

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.77.

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

TSE Composite

Sponsored By...