Stock Market Outlook for April 15, 2024
This week, the market was reminded of the importance of the path of interest rates and the dollar for the strength of equity market performance.
*** 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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Alimentation Couche-Tard, Inc. (TSE:ATD/A.TO) Seasonal Chart
Fidelity MSCI Information Technology Index ETF (AMEX:FTEC) Seasonal Chart
Baidu, Inc. (NASD:BIDU) Seasonal Chart
Cenovus Energy Inc. (TSE:CVE.TO) Seasonal Chart
Western Alliance Bancorp. (NYSE:WAL) Seasonal Chart
Accelr8 Technology (NASD:AXDX) Seasonal Chart
Guidewire Software, Inc. (NYSE:GWRE) Seasonal Chart
iShares S&P Small-Cap 600 Growth ETF (NASD:IJT) Seasonal Chart
The Markets
Stocks had a tough session on Friday as an escalation of geopolitical tensions and a disappointing outlook from JP Morgan had investors pulling back on risk. The S&P 500 Index closed down by 1.46%, showing rejection from previous support, now resistance, at the 20-day moving average (5198) and moving on to the 50-day moving average (5110). Our first level of near-term downside risk has been achieved and our eyes now turn to February’s upside open gap between 4983 and 5038 as the next possible level of support. While the short-term trend is strained, we have yet to observe evidence of intermediate-term damage to act on as part of our seasonal mandate. Momentum indicators remain on the decline, showing that diverging trend versus price that has emphasized the lack of enthusiasm that traders were expressing toward stocks at recent heights. Characteristics of a bullish trend, while showing some frayed edges, are still intact with moving averages hovering above one another and momentum indicators still holding predominantly above their middle lines. Monday is the US Tax deadline, therefore we still have an interest to being exposed to risk (stocks) around this event given the positivity that is typically seen of equity market performance and while the positive intermediate-term path of stocks remains unbroken. If there is something bigger brewing for a downside move, last week’s price action is viewed to be merely the opening draw and there is still plenty of time for the price action to evolve to suggest something sustainably negative. Maintain a positive intermediate-term bias until such point that evidence of resistance overrules levels of support.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Breakout of consolidation ranges for yields and the US Dollar
- Stepping back to see if there is any damage, yet, to the intermediate-term trend of stocks
- REITs
- Consumer Staples
- Net Assets on the Fed’s balance sheet and the waning momentum of the decline in reverse repurchase agreements
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Sentiment on Friday, as gauged by the put-call ratio, ended slightly bullish at 0.85.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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