Equity Clock

Stock Market Outlook for July 2, 2021

Strength in the equity market is the norm for July with the S&P 500 gaining an average of 1.2% in this summer month.

 

 

 

*** 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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International Business Machines (NYSE:IBM) Seasonal Chart

Rogers Communications, Inc. (TSE:RCI/B.TO) Seasonal Chart

Brookfield Property Partners LP (NASD:BPY) Seasonal Chart

Vanguard Mega Cap ETF (NYSE:MGC) Seasonal Chart

Bank Of America Corp. (NYSE:BAC) Seasonal Chart

Royal Bank Of Canada (NYSE:RY) Seasonal Chart

Dajin Resources Corp. (TSXV:DJI.V) Seasonal Chart

Palo Alto Networks Inc. (NYSE:PANW) Seasonal Chart

Trevena, Inc. (NASD:TRVN) Seasonal Chart

 

Note: As a result of the Canada Day holiday on Thursday, we will not be issuing our regular market outlook report on this day.  We will be back on Friday to breakdown the results of the Nonfarm Payroll report for June.

 

The Markets

Stocks closed mixed in the final session of June as investors closed the books on the first half of the year.  The S&P 500 Index gained just over one-tenth of one percent, continuing to knock on the doorstep of the next psychological hurdle at 4300.  This level also marks the mid-point to the approximately 200-point rising range that the benchmark has been trading in through the past eight months.  The limits of the span can be seen around 4200 and 4400.  Support at major moving averages remains intact and short-term horizontal support at 4250 is implied.  This is a market that continues to be supported by rotation and investors looking to buy each and every dip, which is characteristic of a bullish trend.

For the month, the large-cap benchmark was higher by 2.22%, marking the 5th straight month of gains.  The strength is well above the 0.6% decline that has been average for June over the past two decades.  Momentum indicators from this monthly view remain overbought, but, while slight signs of stalling can be observed, have yet to show indications of rolling over.

For the month ahead, strength is the norm with the large-cap benchmark gaining an average of 1.2% in this summer period.  Gains have been realized in 65% on Julys over the past 20 years.  Returns have ranged from a loss of 7.9% in July of 2002 to a gain of 7.4% in July of 2009.  But the strength in the month is certainly not uniform as it also marks the start to the most volatile time of the year for the equity market.  We break it all down in our monthly report that was released to subscribers on Tuesday.  Signup now to receive a copy.

Just Released…

Our monthly report for July has just been sent out to subscribers providing insight on how to position through the month(s) ahead.  Look for this report in your inbox.

Highlights in this report include:

• Equity market tendencies in the month of July
• Favor bonds or stocks?
• The credit market has recovered and what that means for the market
• The two weakest periods in the equity market
• Opportunity to gain exposure to the auto industry
• The trends in vehicle sales highlighting the desire for overseas exposure
• Weak home sales taking a toll on the consumer economy
• The convergence of actual data and analyst forecasts
• Opportunity emerging to ramp up exposure to the ultra large-caps
• Inflationary pressures increasingly placing a strain on the pocketbooks of consumers
• The Canadian Dollar
• Overcoming the currency headwind on commodity exposure
• Strength in shipping activity implying strength in the economy
• Tracking the spread of the virus
• Trading the period of seasonal volatility ahead
• The hedge against summer volatility
• The Summer Rally
• The 12-21 Strategy
• How the market performs at this point in the second year of a market recovery
• Opportunities outside of the US
• The technical status of the S&P 500 Index
• Positioning for the months ahead
• Sector reviews and ratings
• Stocks that have frequently gained in the month of July
• Notable stocks and ETFs entering their period of strength in July

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

• US Oil and Gas inventories and what has dampened our enthusiasm in the energy sector
• The Oil Exploration and Production ETF (XOP) and the risk-reward for the price of Oil
• Canada GDP: What is driving economic activity and the exposure that is desired in our portfolio to take advantage

Subscribe now and we’ll send this outlook to you.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.74.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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