Stock Market Outlook for May 31, 2024
A highly abnormal rise of imports of goods into the US during the month of April has instantly put the trade deficit on an expansionary path, alleviating the concerns that this metric of international trade activity had been portraying previously.
*** 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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Gilead Sciences, Inc. (NASD:GILD) Seasonal Chart
Bank of Montreal (TSE:BMO.TO) Seasonal Chart
Movado Group, Inc. (NYSE:MOV) Seasonal Chart
Enstar Group, Inc. (NASD:ESGR) Seasonal Chart
Xencor, Inc. (NASD:XNCR) Seasonal Chart
Hannon Armstrong Sustainable Infastructure Capital Inc. (NYSE:HASI) Seasonal Chart
Galiano Gold Inc. (AMEX:GAU) Seasonal Chart
The Markets
Stocks closed mixed on Thursday as a selloff in software company Salesforce (CRM) left a dent in the recently reinvigorated growth (technology) trade. The S&P 500 Index ended down by six-tenths of one percent, closing back on its 20-day moving average (5243) and fulfilling the short-term target derived from the breakdown of the 40-point range between 4285 and 4325. MACD has triggered a new sell signal by crossing below its signal line as the topping pattern on the charts of major benchmarks continues to gain merit, threatening a broader downturn than the mere 5% pullback that was recorded in April. A break below support at the April lows would present a downside target to levels around the 200-day moving average, now at 4769. Cracks to the intermediate-term rising trend have developed and this is not the point to step in the way of the correction that has a good likelihood of playing out through the month ahead amidst the period of seasonal weakness that plays out ahead of the summer rally period in July. Topping patterns have become abundant across the market (see our weekly chart books) and a defensive tilt has become obvious, therefore it would take a significant positive catalyst to break the negative setup overhanging the market in the near-term. The strategy over the next month is to mitigate portfolios from downside volatility while seeking to increase exposure to risk again around the end of June once the end of quarter rebalancing period is complete and the positive tendency for stocks around the middle of the year begins.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly jobless claims and the health of the labor market
- US Trade in Goods
- Energy supply and demand, as well as the concerns that have materialized on the fundamental front of the seasonal trade in the sector
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for May 31
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Sentiment on Thursday, as gauged by the put-call ratio, ended slightly bearish at 1.01.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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