Equity Clock

Stock Market Outlook for January 8, 2021

Mission accomplished!  Our target for the S&P 500 Index of 3800 that we have been proposing for months has been achieved.

 

 

 

*** 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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SB Financial Group Inc. (NASD:SBFG) Seasonal Chart

180 Degree Capital Corp. (NASD:TURN) Seasonal Chart

iShares Morningstar Small-Cap Growth ETF (NYSE:JKK) Seasonal Chart

Netflix, Inc. (NASD:NFLX) Seasonal Chart

Flex Ltd. (NASD:FLEX) Seasonal Chart

Africa Oil Corp. (TSE:AOI.TO) Seasonal Chart

Sandstorm Gold Ltd. (TSE:SSL.TO) Seasonal Chart

Vanguard FTSE Canada All Cap Index ETF (TSE:VCN.TO) Seasonal Chart

iShares MSCI All Country Asia ex Japan ETF (NASD:AAXJ) Seasonal Chart

Schwab Fundamental Emerging Markets Large Company Index ETF (AMEX:FNDE) Seasonal Chart

iShares S&P Mid-Cap 400 Growth ETF (NYSE:IJK) Seasoal Chart

iShares U.S. Consumer Services ETF (NYSE:IYC) Seasonal Chart

Invesco Water Resources ETF (NASD:PHO) Seasonal Chart

Vanguard Total International Stock ETF (NASD:VXUS) Seasonal Chart

Gap, Inc. (NYSE:GPS) Seasonal Chart

Kohls Corp. (NYSE:KSS) Seasonal Chart

Chipotle Mexican Grill Inc. (NYSE:CMG) Seasonal Chart

Cinemark Holdings Corp. (NYSE:CNK) Seasonal Chart

Vanguard U.S. Total Market Index ETF (CAD-hedged) (TSE:VUS.TO) Seasonal Chart

First Trust Large Cap Value AlphaDEX Fund (NASD:FTA) Seasonal Chart

Vanguard Total Stock Market ETF (NYSE:VTI) Seasonal Chart

 

 

The Markets

Mission accomplished!  Our target for the S&P 500 Index of 3800 that we have been proposing for months has been achieved following another surge in cyclical assets as investors embrace the transition of power in the US to the Democrats.  The S&P 500 Index gained 1.48% on this pre-employment report Thursday, tacking on to the already upbeat returns for the Santa Claus rally period that began during the week of the Christmas holiday.  The large-cap benchmark is higher by 2.54% over this timeframe, the entirety of which was generated in just the past three sessions.  The result surpasses the 2.2% return that is average through the back half of December and into the first few sessions of the new year.  Levels above the rising 20-day moving average continue to keep the short-term rising trend of the benchmark intact, while downside risks to the 50-day moving average remain.  The intermediate hurdle now sits at 3610, presenting the likely hurdle to be tested on any near-term pullback.  We will refrain from modifying our target now that our 3800 forecast has been fulfilled, merely due to where we are in the calendar.

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

• The view for the market beyond the first week of January
• Treasury Bonds
• Preview of what to expect for the Non-Farm Payroll report
• Weekly Jobless Claims
• Natural Gas
• Canada Merchandise Trade

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The next driver of the market may be the monthly payroll report slated to be released before Friday’s opening bell.  Analysts are expecting the addition of 65,000 payrolls in the last month of the year, although estimates range from a loss of 50,000 to an increase of 302,000.  In a recent report from payroll processor ADP, 123,000 payrolls were indicated to have been lost in this final month of 2020 as pandemic restrictions took a toll.  On average, payrolls decline by 0.2% in the final month of the year as seasonal hiring around the end of year holidays reaches a peak and economic activity slows at the start of winter.  Should the seasonal norm hold true, it would imply the actual loss of 288,000 jobs.  We’ll provide our complete analysis of payrolls in a report that will be released to subscribers intraday on Friday.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.68.

 

 

Seasonal charts of companies reporting earnings today:

• No significant earnings scheduled for today

 

S&P 500 Index

 

 

TSE Composite

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