Over the past two decades, the S&P 500 Index has declined by an average of 0.2% in the month of June.

Stock Market Outlook for June 3, 2024

Over the past two decades, the S&P 500 Index has declined by an average of 0.2% in the month of June.

Real Time Economic Calendar provided by Investing.com.

*** 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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Harley Davidson Inc (NYSE:HOG) Seasonal Chart

Marine Products Corp. (NYSE:MPX) Seasonal Chart

Argan, Inc. (NYSE:AGX) Seasonal Chart

Hawkins Chemical, Inc. (NASD:HWKN) Seasonal Chart

Duke Energy Corp. (NYSE:DUK) Seasonal Chart

Winmark Corp. (NASD:WINA) Seasonal Chart

Highway Holdings Ltd. (NASD:HIHO) Seasonal Chart

TD US Equity CAD Hedged Index ETF (TSE:THU.TO) Seasonal Chart

Morningstar Inc. (NASD:MORN) Seasonal Chart

DexCom Inc. (NASD:DXCM) Seasonal Chart

BRP Inc. (TSE:DOO.TO) Seasonal Chart

Invesco S&P 500 Top 50 ETF (NYSE:XLG) Seasonal Chart

The Markets

Stocks ended positive to close out the last trading day of May as portfolio managers feverishly rebalanced their books into the final minutes of the Friday session. The S&P 500 Index closed with a gain of eight-tenths of one percent, ending higher after testing the rising 50-day moving average (5181) at the lows of the session. MACD remains on a fresh sell signal following the bearish crossover charted in the previous session, continuing to provide evidence of waning buying demand around recent record heights. The threat remains of a broader downturn beyond 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 4773. 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:

Monthly look at the large-cap benchmark

Tendency for stocks in the month of June

Securities that have gained or lost in every June over their trading history

Market valuations showing signs of topping

Canada Gross Domestic Product (GDP

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For the month ahead, based on the past two decades, June tends to be a weak month, performance wise, for stocks, but it also marks the start of the summer rally period, implying that weakness in the month warrants buying. Over the past 20 years, the S&P 500 Index has lost 0.2%, on average, in the sixth month of the year with a frequency of positive results still hanging in at 60% of periods. Results have ranged from a decline of 8.6% in June of 2008 to a gain of 6.9% in June of 2019. Weakness is dominated around the middle of the month, particularly between June 14th and June 27th, on average, representing the first of the two weakest 2-week spans of the year that tends to see equity prices mean revert into the end of the quarter. The S&P 500 ETF has produced declines averaging of six-tenths of one percent through this timeframe. Traders have typically been well suited to step back from equity exposure during this succinct two-week timeframe, seeking to regroup and become re-exposed to risk (stocks) for the summer rally period that follows between June 27th and July 17th. We break down everything that were are looking for in our just released monthly report for May.

Just released…

Our monthly report for June is out, providing you with everything you need to know to navigate the market through the month(s) ahead.

Highlights in this report include:

Equity market tendencies in the month of June

Market has become risk averse

Down with Value/Core-cyclicals and up with Growth (Technology)

VIX triggering a Sell Signal according to our 12-21 approach

The Decline of Market Liquidity

US Dollar

April change in new home sales the third weakest on record and now home building stocks are in trouble

Cost of borrowing taking a toll on consumer loan activity

Are consumer using the equity in their homes to consolidate their high cost credit card debt?

Industrial Production

The role of Artificial Intelligence (AI) in industrial activity

Defense still in a position to defend your portfolio this summer

The breadth of manufacturing activity not providing the enthusiasm to businesses that is typically seen in the spring

Struggling shipping activity still providing a leading indication of a recession

Below average trends of grocery store and restaurant sales profiling a more discerning consumer

Discerning consumer resulting in poor spending momentum

The first of the weakest two-week spans of the year in the equity market

Election Year tendency for stocks

Relative trend of bonds over stocks at a point that may warrant overweighting the former in portfolios

Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs

Positioning for the months ahead

Sector Reviews and Ratings

Stocks that have Frequently Gained in the Month of June

Notable Stocks and ETFs Entering their Period of Strength in June

Subscribers can look for this 107-page report in their inbox and, soon, in the report archive.

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With the new month upon us and as we celebrate the release of our monthly report for June, today we release our screen of all of the stocks that have gained in every June over their trading history. While we at Equity Clock focus on a three-pronged approach (seasonal, technical, and fundamental analysis) to gain exposure to areas of the market that typically perform well over intermediate (2 to 6 months) timeframes, we know that stocks that have a 100% frequency of success for a particular month is generally of interest to those pursuing a seasonal investment strategy. Below are the results:

And how about those securities that have never gained in this sixth month of the year, here they are:

*Note: None of the results highlighted above have the 20 years of data that we like to see in order to accurately gauge the annual recurring, seasonal influences impacting an investment, therefore the reliability of the results should be questioned. We present the above list as an example of how our downloadable spreadsheet available to yearly subscribers can be filtered.

Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.94.