Stock Market Outlook for April 18, 2024
The prospect that the Bank of Canada may be gearing up to cut interest rates has pushed the Canadian Dollar down to multi-year support, a break of which could see a test of multi-decade lows.
*** 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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New Mountain Finance Corp. (NYSE:NMFC) Seasonal Chart
Spin Master Corp. (TSE:TOY.TO) Seasonal Chart
Barclays ETN+ Shiller CAPE Index ETN (AMEX:CAPE) Seasonal Chart
Western Asset Premier Bond Fund (NYSE:WEA) Seasonal Chart
UMB Financial Corp. (NASD:UMBF) Seasonal Chart
Pioneer Municipal High Income Trust (NYSE:MHI) Seasonal Chart
Blackrock MuniHoldings Fund, Inc. (NYSE:MHD) Seasonal Chart
HealthEquity, Inc. (NASD:HQY) Seasonal Chart
ServiceNow, Inc. (NYSE:NOW) Seasonal Chart
Sypris Solutions, Inc. (NASD:SYPR) Seasonal Chart
Northwest Pipe Co. (NASD:NWPX) Seasonal Chart
Nathans Famous, Inc. (NASD:NATH) Seasonal Chart
The Markets
Stocks remain tenuous as traders continue to monitor the developments pertaining to geopolitics and the recent rise of interest rates, both of which have pressured the near-term trend of many equity benchmarks. The S&P 500 Index ended the day lower by nearly six-tenths of one percent, moving into February’s upside gap between 4983 and 5038 that we have had our eyes on for some time. This zone will garner a lot of scrutiny, but, if it fails, a move back to the January breakout point at 4800 becomes likely. It has been our view that a correction of 10%+ down to the previous breakout zones between 4600 and 4800 will not materialize until the off-season for stocks between May and October. Faster moving momentum indicators, such as Stochastics, have become oversold and the hourly chart is showing a parabolic decline, something that is unsustainable over a sustained period of time. Exhaustive candlesticks on the chart of the Volatility Index (VIX) are hinting that fear may be peaking. The price action of recent weeks has certainly corrected much of the excesses that had been built up and investors should be prepared for the rebound out of this short-term slide to play the ongoing positive intermediate-term path. Seasonally, a couple of more weeks remain in the best six month of the year timeframe for stocks and we have no reason to develop a negative bias, yet, akin to what is normally appropriate for the off-season that runs from May to October.
Today, in our Market Outlook to subscribers, we discuss the following:
- Short bets that are working as a ballast to portfolios in this volatile tape
- US Bank stocks
- Canada Consumer Price Index (CPI)
- Canadian Dollar
- Energy supply and demand, along with the seasonal trade in the sector
- Investor sentiment
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Sentiment on Wednesday, as gauged by the put-call ratio, ended overly bearish at 1.37.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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