Stock Market Outlook for February 16, 2024
While manufacturer sentiment may be rebounding into the spring, it is still well below where we typically see it for this time of year, reflective of a bifurcated manufacturing economy.
*** 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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SPDR Barclays High Yield Bond ETF (NYSE:JNK) Seasonal Chart
Consumer Staples Select Sector SPDR Fund (NYSE:XLP) Seasonal Chart
Campbell Soup Co. (NYSE:CPB) Seasonal Chart
BMO Long Corporate Bond Index ETF (TSE:ZLC.TO) Seasonal Chart
Kraft Heinz Co. (NASD:KHC) Seasonal Chart
Alliant Energy Corp. (NASD:LNT) Seasonal Chart
Flowers Foods, Inc. (NYSE:FLO) Seasonal Chart
Loblaw Companies Ltd. (TSE:L.TO) Seasonal Chart
The Markets
Stocks continued to climb out of the hole they had dug on Tuesday as traders look for opportunities to rotate away from overbought and overvalued growth sectors (technology). The S&P 500 Index closed with a gain of six-tenths of one percent, moving back above the psychologically important 5,000 level and recording a fresh all-time closing high. Tuesday’s downside gap between 4967 and 5019 has so far failed to act as a point of resistance that was seen of it previous as the market navigates into the weaker half of February. Short-term support remains well defined at the 20-day moving average (4934) and characteristics of a bullish intermediate-term trend persist with moving averages moving above one another and momentum indicators holding above their middle lines. Any weakness that may play out over the next few weeks, aligning with the period of seasonal weakness in the market, is viewed as a counter-trend move within a rising intermediate-term path, allowing for the renewal of risk exposure for the tail-end to the best six month trend in March and April. The traditional signs of risk aversion that would coincide with a more pronounced pullback in stocks are not apparent today, leaving us limited on risk-reduction measures in portfolios over the near-term; we are still far from confirming a peak in stocks that is worthy to be bearish of over a prolonged timeframe.
Today, in our Market Outlook to subscribers, we discuss the following:
- US Retail Sales
- US Industrial Production
- Manufacturer Sentiment
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Sentiment on Thursday, as gauged by the put-call ratio, ended slightly bullish at 0.88.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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