Stock Market Outlook for March 21, 2024
Abnormally mild temperatures in February boosted discretionary spending activity and it is also leading to a renewed above average adoption of credit card debt.
*** 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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Abbott Laboratories (NYSE:ABT) Seasonal Chart
Sherwin Williams Co. (NYSE:SHW) Seasonal Chart
Hennessy Advisors Inc. (NASD:HNNA) Seasonal Chart
FirstService Corp. (NASD:FSV) Seasonal Chart
Invesco S&P Global Water Index ETF (NYSE:CGW) Seasonal Chart
Nuveen S&P 500 Dynamic Overwrite Fund (NYSE:SPXX) Seasonal Chart
Invitation Homes Inc. (NYSE:INVH) Seasonal Chart
The Markets
Signal from the Fed that three interest rate cuts are still on the table for this year juiced the equity market to another record high. The S&P 500 Index closed with a gain of just less than nine-tenths of one percent, breaking above short-term resistance at 5189. The benchmark now finds itself above the level that many analysts had pegged as the target for the end of the year at 5200 and upward revisions to forecasts will likely be required through the months ahead. This is characteristic of a bull market trend. Short-term support at the 20-day moving average (5125) has been reconfirmed in recent days, mitigating the digestion that we have been expecting of the market into the end of the first quarter. The window for any type of near-term pause/pullback is closing quick given that April brings around a new set of positivity amidst start of month/quarter fund inflows and the investments that surround the IRA tax contribution deadline. Negative divergences with respect to MACD and RSI suggests that traders are not all that enthusiastic about buying around these heights, but, if there is cash on the sidelines or expected to come into the market in the month ahead, these market participants may not have option of waiting to buy. A bias in portfolio exposure remains towards an equal weight allocation to the equity market (eg RSP over SPY) given that there are still plenty of segments of the market that investors may be underweight (eg. Energy, REITs) and would be poised to benefit from rotation from the formerly beloved technology trade. See our Accumulate list in our chart books for other ETFs/industries that have the setup for an ongoing positive bias heading into the upbeat period that April delivers.
Today, in our Market Outlook to subscribers, we discuss the following:
- The backdrop for US Banks
- Visa Discretionary Spending Momentum Index
- The change in Credit Card Loans
- Consumer and Business Loan activity
- Consumer Finance industry
- Energy Supply and Demand
- Breakout on the Energy Sector ETF
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Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 0.97.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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