Equity Clock

Stock Market Outlook for February 5, 2021

The average change in payrolls for January is a decline of 2.1%, which would imply the actual loss of 3.019 million jobs when results are released on Friday.

 

 

 

*** 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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HanesBrands, Inc. (NYSE:HBI) Seasonal Chart

Steven Madden, Ltd. (NASD:SHOO) Seasonal Chart

Invesco DWA Consumer Cyclicals Momentum ETF (NASD:PEZ) Seasonal Chart

Red Robin Gourmet Burgers Inc. (NASD:RRGB) Seasonal Chart

Liquid Media Group Ltd. (NASD:YVR) Seasonal Chart

Globe Life Inc. (NYSE:GL) Seasonal Chart

Paycom Software, Inc. (NYSE:PAYC) Seasonal Chart

iShares Global Healthcare Index ETF (CAD-Hedged) (TSE:XHC.TO) Seasonal Chart

ProShares Ultra MidCap400 (NYSE:MVV) Seasonal Chart

GWR Global Water Resources Corp. (TSE:GWR.TO) Seasonal Chart

Utilities Select Sector SPDR Fund (NYSE:XLU) Seasonal Chart

 

 

The Markets

Stocks closed solidly higher on Thursday as investors wait for the results of the monthly non-farm payroll report that is slated to be released before Friday’s session.  The S&P 500 Index added 1.09%, stretching its legs to close at a new record high.  Support remains intact at the rising 50-day moving average and the 20-day moving average has also been retaken as a level for investors to shoot off of.  Horizontal support at 3550 remains the logical downside risk should intermediate support at the 50-day moving average fail to hold.  Momentum indicators continue to show characteristics of a  bullish trend, although a negative momentum divergence with respect to MACD continues to stand out, indicative of waning buying demand.  This is still a buy-the-dip market, as noted in our monthly report.  A mix of core-cyclical and growth names led the gains on the day.

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

• The state of jobless claims in the US and what to expect for Friday’s payroll report
• Natural Gas
• Vehicle Sales in the US
• US Factory Orders and what they have to say about how we should be positioned in equity portfolios

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Today is employment report Friday.  Analysts are expecting that 50,000 payrolls were added in January, but the range of expectations is all over the place from a decline of 100,000 to a gain of 400,000.  We cannot recall a greater dispersion between the high and low estimate in recent history.  But while analysts have come to the consensus that a gain will be recorded, not many in the market understand that January is actually a very weak month for payrolls.  Employment typically falls sharply, on average, in the first month of the year as seasonal hires from the end of the year are let go.  The average change in payrolls for January is a decline of 2.1%, which would imply the actual loss of 3.019 million payrolls.  We will break down the results for subscribers in our intraday report that will be released on Friday.  Subscribe now to be included on our distribution list.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.73.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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