Stock Market Outlook for February 5, 2024
The draw towards the psychologically important 5,000 level on the S&P 500 Index continues, despite the lack of expansion of market breadth.
*** 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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Cadence Design Systems, Inc. (NASD:CDNS) Seasonal Chart
Restaurant Brands International Inc. (TSE:QSR.TO) Seasonal Chart
Gear Energy Ltd. (TSE:GXE.TO) Seasonal Chart
Fidelity MSCI Consumer Staples Index ETF (AMEX:FSTA) Seasonal Chart
HanesBrands, Inc. (NYSE:HBI) Seasonal Chart
Nordic American Tanker Shipping Ltd. (NYSE:NAT) Seasonal Chart
JPMorgan U.S. Quality Factor ETF (AMEX:JQUA) Seasonal Chart
The Markets
Stocks jumped on Friday as investors flooded into shares of Amazon (AMZN) and Meta (META) following the release of their earnings reports, keeping the growth trade in the market alive. The S&P 500 Index closed with a gain of just over one percent, inching closer to the psychologically important 5000 level that has been speculated to act as a draw to buying demand until it is achieved. Momentum indicators are back on the rise following their short-term pullback with MACD mitigating a negative/bearish crossover in a last minute reprieve. Both MACD and RSI are remaining firmly above their middle lines, which is characteristic of a bullish intermediate term trend. There remains little to alter our positive view of the large-cap benchmark based on the intermediate outlook that our seasonal strategy caters towards, still leaving us with nothing to do from a portfolio allocation perspective. Support remains embedded at rising major moving averages at the 20 and 50-day and the implication of previous resistance as support at 4800 provides an effective stop to any short-term allocations to equity market positions. While February, overall, is a lacklustre month for equity market performance, the first half of the month tends to be positive, while the back half of the month tends to account for the majority of the weakness.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Equal Weight S&P 500 ETF remains capped below significant resistance
- US Employment Situation and the investment themes worthy of consideration within
- Average hourly earnings
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for February 5
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Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.06.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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