Stock Market Outlook for June 10, 2024
Preparing for June weakness while anticipating summer strength.
*** 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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American Elec Pwr Co., Inc. (NYSE:AEP) Seasonal Chart
America Movil S.A. de CV (NYSE:AMX) Seasonal Chart
Atlanticus Holdings Corp. (NASD:ATLC) Seasonal Chart
Standex Intl Corp. (NYSE:SXI) Seasonal Chart
Vanguard Mega Cap ETF (NYSE:MGC) Seasonal Chart
The Markets
Stocks closed mildly lower on Friday as a stronger than forecast employment report for May sent yields and the dollar soaring, thereby pressuring risk assets (stocks). The S&P 500 Index closed down by just over a tenth of one percent, showing a rather indecisive candlestick around the recent charted all-time highs. Support can be pegged at the 50-day moving average (5190) after traders moved their stops higher from the 100-day moving average, which was tested at the lows in April. Momentum indicators continue to show negative divergences versus price, highlighting the lack of buying demand traders are expressing towards stocks at these heights. Now that the first week of June is in the books, seasonal tendencies for stocks turn negative through to the middle/end of the month as mean-reversion and overall portfolio re-balancing weighs on market performance ahead of the close of the second quarter (and first half of the year). Near-term seasonal tendencies and the risk aversion that was worked its way into the market in recent weeks suggest that this is not the time to be aggressive in risk assets (stocks), but buying opportunities for the summer rally period that runs, on average, between June 27th and July 17th will be sought through the normally weak June timeframe ahead.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the S&P 500 Index, along with the sector influences
- US Dollar Index
- US Employment Situation and the investment implications within
- Canada Labour Force Survey and the strains in business activity that are being portrayed
- The strong rise in unemployment
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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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