Stock Market Outlook for January 10, 2024
The Price-Earnings multiple of the S&P 500 is showing struggle at last July’s high as market participants scrutinize whether an above average valuation is warranted.
*** 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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Viemed Healthcare Inc. (NASD:VMD) Seasonal Chart
Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSE:RSPS) Seasonal Chart
CVS Health Corp. (NYSE:CVS) Seasonal Chart
PG&E Corp. (NYSE:PCG) Seasonal Chart
CONMED Corp. (NYSE:CNMD) Seasonal Chart
ENSERVCO Corp. (AMEX:ENSV) Seasonal Chart
AudioEye, Inc. (NASD:AEYE) Seasonal Chart
The Markets
Stocks struggled to gain traction following Monday’s rally as the US Dollar continue to inch higher, providing a headwind against stocks as per seasonal norms for the first couple of months of the year. The S&P 500 Index closed lower by just over a tenth of one percent, sitting just above a point of support at the 20-day moving average of 4729. The benchmark remains below the significant cap provided by the all-time high charted two years ago at 4800 and traders are certainly debating whether the momentum that the market has been exhibiting is sufficient to fuel escape velocity. Momentum indicators have rolled over from overbought territory, although they are still showing characteristics of a bullish trend above their middle lines. The market remains in this logical zone to pause/digest in the near-term, aligned with seasonal norms and the tendency for stocks during election years, but until the intermediate path of the benchmark definitively shifts from its positive path, utilizing the weakness to add to equity positions for the strength that is normal through the end of winter and into spring appears appropriate. A recession would, quite obviously, be the significant risk that alters this expected course; we continue to scrutinize leading and coincident indicator to determine when this negative economic event may trigger.
Today, in our Market Outlook to subscribers, we discuss the following:
- The direction of earnings expectations
- The market multiple and what expectations suggest as enticing sector candidates for the year ahead
- Citigroup Economic Surprise Index
- US Factory Orders
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Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bullish at 0.92.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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