Stock Market Outlook for October 12, 2022
While both asset classes have been dismal this year, bonds continue to outperform stocks, which has kept the stock market on a sell signal according this metric since the start of the year.
*** 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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Canadian General Investments, Ltd. (TSE:CGI.TO) Seasonal Chart
WisdomTree U.S. Quality Shareholder Yield Fund (AMEX:QSY) Seasonal Chart
SunCoke Energy Inc. (NYSE:SXC) Seasonal Chart
Biogen Inc. (NASD:BIIB) Seasonal Chart
Mistras Group Inc. (NYSE:MG) Seasonal Chart
Hudson Pacific Properties Inc. (NYSE:HPP) Seasonal Chart
Domtar Corp. (NYSE:UFS) Seasonal Chart
Synaptics, Inc. (NASD:SYNA) Seasonal Chart
Vodafone Group Public Limited Company (NASD:VOD) Seasonal Chart
The Markets
Stocks faltered on Tuesday, giving up midday gains, as traders digested comments from the Bank of England who indicated that pension funds have three days to rebalance their books in order to bring stability back to the bond market. The S&P 500 Index lost just less two-thirds of one percent, closing back at the low of the year that was charted a few days ago at the end of September. The inability of stocks to gain any traction and the constant bombardment of negative headlines is something that is typical of a recessionary framework in the economy, even though data suggests that we have yet to cross the threshold to indicate an economic rollover. Previous support at the June low was tested as resistance intraday and, obviously, the test maintained the trend of stronger reactions to levels of resistance than levels of support, certainly not the backdrop to be aggressive in stocks, yet. MACD has crossed back below its signal line, triggering a renewed sell signal as characteristics of a bearish trend continue to materialize. Major moving averages continue to point lower, acting as levels of resistance and providing hurdles to sell into in order to alleviate equity exposure until these paths shift.
Today, in our Market Outlook to subscribers, we discuss the following:
- The ratio of bonds versus stocks
- Wholesale Inventories and the opportunity that this one segment of the economy is presenting
- Freightos Global Container Index
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Sentiment on Tuesday, as gauged by the put-call ratio, ended neutral at 0.96.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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