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Stock Market Outlook for May 25, 2023

Small-cap valuations are around the lowest level in the past two decades and seasonal tendencies are favourable for the group over the next month and a half, but, yet, buying demand remains absent.

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*** 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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Camden National Corp. (NASD:CAC) Seasonal Chart

Camden National Corp. (NASD:CAC) Seasonal Chart

Bright Horizons Family Solutions Inc. (NYSE:BFAM) Seasonal Chart

Bright Horizons Family Solutions Inc. (NYSE:BFAM) Seasonal Chart

VanEck Vectors Environmental Services ETF (NYSE:EVX) Seasonal Chart

VanEck Vectors Environmental Services ETF (NYSE:EVX) Seasonal Chart

iPath Bloomberg Lead Subindex Total Return ETN (NYSE:LD) Seasonal Chart

iPath Bloomberg Lead Subindex Total Return ETN (NYSE:LD) Seasonal Chart



The Markets

Stocks slipped for a second day as traders continue to monitor the progress of debt ceiling negotiations, which are reported to be at a stand-still.  The S&P 500 Index slipped by nearly three-quarters of one percent, trading back to the lows that were recorded mid-month and erasing last week’s gain attributed to optimism that a debt ceiling deal would be reached in time to avoid default.  The benchmark remains capped by the band of horizontal resistance between 4100 and 4200, the lower limit of which was touched at the lows of Wednesday’s session.  Support remains implied around the congestion of major moving averages between 3980 and 4080.  In a bit of a whipsaw action, a renewed MACD sell signal has been triggered, but, as highlighted in a recent report, the narrow, range-bound trend that the market has been in for a prolonged period of time make the signals that this momentum initiator generates almost irrelevant.  Momentum indicators are still showing a rather negative slope since peaking in the middle of April, not showing anything reminiscent of a new uptrend getting underway.  The market remains in need of a catalyst to fuel a sustained move and, unless there is a catastrophic debt default in the US (which seems improbable), its seems likely that any debt ceiling resolution will result only in a short-lived bounce.  Seasonal tendencies for the market are positive in the days surrounding the Memorial Day holiday with the upbeat sentiment carrying into the new month of June, following which mean reversion and general portfolio re-allocations are the norm through the middle of June.

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

  • Double-top on the TSX Composite
  • The struggle with Canadian banks/financials
  • Weekly US Petroleum Status and the upside risks in the price of Oil
  • Small-Cap stocks and their leading implications for broader market gyrations

Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for May 25

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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.06.


Seasonal charts of companies reporting earnings today:

Costco Wholesale Corporation Seasonal Chart Royal Bank Of Canada Seasonal Chart Medtronic plc Seasonal Chart Toronto Dominion Bank (The) Seasonal Chart NetEase, Inc. Seasonal Chart Workday, Inc. Seasonal Chart Autodesk, Inc. Seasonal Chart Marvell Technology, Inc. Seasonal Chart Canadian Imperial Bank of Commerce Seasonal Chart Dollar Tree, Inc. Seasonal Chart Ulta Beauty, Inc. Seasonal Chart Best Buy Co., Inc. Seasonal Chart Deckers Outdoor Corporation Seasonal Chart Burlington Stores, Inc. Seasonal Chart Ralph Lauren Corporation Seasonal Chart RH Seasonal Chart PagSeguro Digital Ltd. Seasonal Chart Weibo Corporation Seasonal Chart Gap, Inc. (The) Seasonal Chart Hamilton Lane Incorporated Seasonal Chart CSW Industrials, Inc. Seasonal Chart GDS Holdings Limited Seasonal Chart Columbus McKinnon Corporation Seasonal Chart American Woodmark Corporation Seasonal Chart Mesa Laboratories, Inc. Seasonal Chart Titan Machinery Inc. Seasonal Chart Thermon Group Holdings, Inc. Seasonal Chart Seanergy Maritime Holdings Corp Seasonal Chart Silvercorp Metals Inc. Seasonal Chart Movado Group Inc. Seasonal Chart REX American Resources Corporation Seasonal Chart Genesco Inc. Seasonal Chart


S&P 500 Index


TSE Composite


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