Stock Market Outlook for October 2, 2023
October, while volatile, has historically been a positive month for stocks with the S&P 500 Index averaging a return of 1.3%.
*** 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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American Woodmark Corp. (NASD:AMWD) Seasonal Chart
Universal Technical Institute, Inc. (NYSE:UTI) Seasonal Chart
NLIndustries, Inc. (NYSE:NL) Seasonal Chart
Lattice Semiconductor Corp. (NASD:LSCC) Seasonal Chart
Invesco S&P 500 Equal Weight Materials ETF (NYSE:RTM) Seasonal Chart
Consumer Portfolio Services, Inc. (NASD:CPSS) Seasonal Chart
Materials Select Sector SPDR Fund (NYSE:XLB) Seasonal Chart
Invesco KBW Bank ETF (NASD:KBWB) Seasonal Chart
Applied Materials, Inc. (NASD:AMAT) Seasonal Chart
CNH Industrial NV (NYSE:CNHI) Seasonal Chart
Triton International Ltd. (NYSE:TRTN) Seasonal Chart
Sysco Corp. (NYSE:SYY) Seasonal Chart
Deere & Co. (NYSE:DE) Seasonal Chart
QUALCOMM Inc. (NASD:QCOM) Seasonal Chart
SPDR S&P Capital Markets ETF (NYSE:KCE) Seasonal Chart
iShares U.S. Insurance ETF (NYSE:IAK) Seasonal Chart
The Markets
Stocks closed little changed in the final session of September, capping off the third quarter and bringing an end to the weakest time of the year for equity market. The S&P 500 Index closed with a loss of just over a quarter of one percent, continuing to stake a short-term low above significant support at 4200. At the high of the session, the benchmark surpassed the 4313 hurdle that we highlighted in recent reports as providing indication that a short-term low has been achieved, defining the setup to see a reprieve of near-term selling pressures heading into the new month and quarter. Momentum indicators continue to show early signs of bottoming following the slide that has been realized of prices during what is normally the weakest two-week span of the year for stocks. Resistance can be pegged overhead at the declining 20 and 50-week moving averages at 4409 and 4452, respectively.
Today, in our Market Outlook to subscribers, we discuss the following:
- Monthly look at the large-cap benchmark
- October tendencies for stocks
- The list of all securities that have either gained or lost in every October over their trading history
- US International Trade
- Canada Gross Domestic Product (GDP)
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for October 2
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Just released…
Our monthly report for October is out, providing you with the insight to navigate through this market in the month(s) ahead.
Highlights in this report include:
- Equity market tendencies in the month of October
- Rising trend of bond yields
- Portfolio managers the most bearish of the bond market on record
- Level of liquidity in the system has not yet returned to a tightening path
- Credit conditions remaining eerily subdued
- Rate strength fueling the dollar headwind against stocks
- Move away from Growth
- Home builders feeling the drag from higher interest rates
- Rise of housing costs ramping up in metrics of CPI
- Manufacturer sentiment still dismal
- Producers of consumer goods and business equipment struggling
- Rollover of Copper indicative of the weakness in the manufacturing economy
- Shipping activity highlighting a subdued retail stocking period
- Baltic Dry Index diverging from its seasonal average trend
- Poor trend of consumer gasoline demand highlighting strains in the consumer economy
- Strength in energy production a benefit to energy sector stocks
- Higher gas prices, lower restaurant sales
- Consumers leaning on their credit cards and delinquencies are on the rise
- Above average rise of unemployment leaving the consumer economy vulnerable
- Surge of social assistance employment indicative of rising burdens against the consumer
- Start of respiratory illness season
- Signs of risk aversion in the price action
- Lack of meaningful upside progress for stocks in seven quarters
- Banks the “canary in the coal mine”
- Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs
- Positioning for the months ahead
- Sector Reviews and Ratings
- Stocks that have Frequently Gained in the Month of October
- Notable Stocks and ETFs Entering their Period of Strength in October
Subscribers can look for this 111-page report in their inbox and, soon, in the report archive.
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With the new month upon us and as we celebrate the release of our monthly report for October, today we release our screen of all of the stocks that have gained in every October over their trading history. While we at Equity Clock focus on a three-pronged approach (seasonal, technical, and fundamental analysis) to gain exposure to areas of the market that typically perform well over intermediate (2 to 6 months) timeframes, we know that stocks that have a 100% frequency of success for a particular month is generally of interest to those pursuing a seasonal investment strategy. Below are the results:
And how about those securities that have never gained in this tenth month of the year, here they are:
*Note: None of the results highlighted above have the 20 years of data that we like to see in order to accurately gauge the annual recurring, seasonal influences impacting an investment, therefore the reliability of the results should be questioned. We present the above list as an example of how our downloadable spreadsheet available to yearly subscribers can be filtered.
Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.07.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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