Stock Market Outlook for June 20, 2024
Retailer inventories are showing the second strongest increase through the first four months of the year in the past two decades, highlighting the disconnect between supply and demand that is contributing to disinflationary pressures for discretionary goods.
*** 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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Carmax Inc. (NYSE:KMX) Seasonal Chart
Rhythm Pharmaceuticals, Inc. (NASD:RYTM) Seasonal Chart
Cascades, Inc. (TSE:CAS.TO) Seasonal Chart
Altus Group Ltd. (TSE:AIF.TO) Seasonal Chart
Agree Realty Corp. (NYSE:ADC) Seasonal Chart
Lindsay Corp. (NYSE:LNN) Seasonal Chart
Tesla Inc. (NASD:TSLA) Seasonal Chart
Invesco QQQ Trust (NASD:QQQ) Seasonal Chart
Vanguard Russell 1000 Growth ETF (NASD:VONG) Seasonal Chart
Note: US Markets are closed on Wednesday in commemoration of Juneteenth National Independence Day. As a result of this holiday, our next report will be released on Thursday.
The Markets
Stocks closed mildly higher on Tuesday as the Artificial Intelligence (AI)/semiconductor rally continues to support broader market benchmarks. The S&P 500 Index closed with a gain of a quarter of one percent, achieving a fresh record high and continuing to mitigate the weakness that is normal for this period in June. Major moving averages are in positions of support below, including the 50-day (5220), providing stops to long allocations as we progress towards the period of volatility for stocks during the back half of the third quarter. The Relative Strength Index (RSI) continues to push higher into overbought territory (above 70), somewhat representative of what could be argued as the chase for performance ahead of the close of the second quarter. The negative divergence with respect to MACD has been broken, finally providing legitimacy to the new all-time highs in price; various breadth indicators, however, somewhat contradict this view as underlying risk aversion remains in play. Just over a week remains in this normally weak period in June before the notorious summer rally takes hold, lifting stocks through the start of July as new funds are put to work and as investors start to anticipate earnings results from the second quarter.
Today, in our Market Outlook to subscribers, we discuss the following:
- US Retail Sales
- The significant rise in retailer inventories
- US Industrial Production and the investment implications within the results
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.83.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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