Stock Market Outlook for January 8, 2024
The precedent of a negative Santa Claus rally and a first week of January return is not encouraging for the prospects of the equity market through the year ahead.
*** 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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Solarwinds Corporation (NYSE:SWI) Seasonal Chart
McCormick & Co., Inc. (NYSE:MKC) Seasonal Chart
Chipotle Mexican Grill Inc. (NYSE:CMG) Seasonal Chart
Tractor Supply Co. (NASD:TSCO) Seasonal Chart
Marten Transport, Ltd. (NASD:MRTN) Seasonal Chart
Imax Corp. (NYSE:IMAX) Seasonal Chart
Invesco S&P 500 Quality ETF (AMEX:SPHQ) Seasonal Chart
Consumer Staples Select Sector SPDR Fund (NYSE:XLP) Seasonal Chart
Vanguard Global Momentum Factor ETF (TSE:VMO.TO) Seasonal Chart
Big Lots, Inc. (NYSE:BIG) Seasonal Chart
Metro, Inc. (TSE:MRU.TO) Seasonal Chart
Atco Ltd. (TSE:ACO/X.TO) Seasonal Chart
Watsco, Inc. (NYSE:WSO) Seasonal Chart
Brookfield Asset Management, Inc. (TSE:BAM/A.TO) Seasonal Chart
Sandstorm Gold Ltd. (TSE:SSL.TO) Seasonal Chart
Franco-Nevada Corp. (TSE:FNV.TO) Seasonal Chart
iShares S&P/TSX Capped Financials Index ETF (TSE:XFN.TO) Seasonal Chart
Netflix, Inc. (NASD:NFLX) Seasonal Chart
Home Depot, Inc. (NYSE:HD) Seasonal Chart
Colgate-Palmolive Co. (NYSE:CL) Seasonal Chart
Broadcom Inc. (NASD:AVGO) Seasonal Chart
The Markets
Stocks wobbled in the final session of the first week of the year as traders debated on how to react to the much stronger than expected payroll report for December. The S&P 500 Index managed to finish the session higher by just less than two-tenths of one percent, remaining pinned below the 20-day moving average that was broken in the previous session. The one-session reprieve in selling pressures that has been observed to start the year does little to change the near-term trend back to positive and the risk remains that we will see a test of previous resistance, now support, at 4600. The intermediate-term path stemming from the October of 2022 bottom remains positive, suggesting that remaining buyers of these near-term dips remains prudent until evidence materializes that a sustainable trend lower is set to begin. Daily momentum indicators continue to alleviate the extreme overbought readings that had been derived through the middle of December, but they remain above their middle lines, which is characteristic of a bullish trend.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Performance of stocks following failed Santa Claus Rally periods
- The precedent of negative first week of January returns on the equity market performance through the year ahead
- US Employment Situation
- Canada Labour Force Survey
- Investor sentiment and the pronounced plunge in investment manager exposure to stocks last week
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Sentiment on Friday, as gauged by the put-call ratio, ended overly bearish at 1.22.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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