Over the past 20 years, July has been the strongest month of the year for the S&P 500 Index with gains averaging 2.3% and three out of four periods ending higher.

Stock Market Outlook for July 2, 2024

Over the past 20 years, July has been the strongest month of the year for the S&P 500 Index with gains averaging 2.3% and three out of four periods ending higher.

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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iShares MSCI UAE Capped ETF (NASD:UAE) Seasonal Chart

Grid Dynamics Holdings Inc. (NASD:GDYN) Seasonal Chart

Consolidated Edison, Inc. (NYSE:ED) Seasonal Chart

iShares U.S. Technology ETF (NYSE:IYW) Seasonal Chart

Richelieu Hardware Ltd. (TSE:RCH.TO) Seasonal Chart

Radian Group, Inc. (NYSE:RDN) Seasonal Chart

EPAM Systems, Inc. (NYSE:EPAM) Seasonal Chart

Note: Monday is a holiday in Canada (Canada Day) and, as a result, our next Market Outlook report will be released on Tuesday. Our weekly chart books will be updated, as per usual, on Sunday, but the commentary will be provided on Tuesday. Happy Canada Day to our Canadian audience!

The Markets

Stocks closed slightly lower in the last session of the second quarter as portfolio managers conducted their final trades to balance their books. The S&P 500 Index closed with a loss of four-tenths of one percent, charting an indecisive doji candlestick within the tight consolidation span that it has been within for the past week between 5445 and 5500. A break of the short-term span would have upside or downside implications of the same magnitude, or 55 points (~1.0%). Major moving averages continue to fan out positively below price, providing a number of points of support below to carry price. The Relative Strength Index (RSI) is “bobbing” around overbought territory at 70, highlighting a bit of a stretched state heading through the notoriously positive timeframe for stocks that is upon us, but, ultimately, this is a characteristic of a bullish trend. So long as characteristics of a bullish trend persist, reason to bet on the upside potential for the summer rally exists.

Today, in our Market Outlook to subscribers, we discuss the following:

Monthly look at the large-cap benchmark

Tendencies for stocks during the month of July and the desired strategy for this month ahead

The change in margin debt and credit balances in investor accounts

Securities that have gained or lost in every July throughout their trading history

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For the month ahead, based on the past two decades, July tends to be a strong period, performance wise, for stocks, encompassing the summer rally period that runs, on average, through to the 17th of the month. The S&P 500 Index has gained 2.3%, on average, in the seventh month of the year over the past 20 years with a frequency of positive results coming in at an impressive 75% of periods. Results have ranged from a decline of 3.4% in July of 2004 to a gain of 9.1% in July of 2022. We break down everything that we are looking for in our just released monthly report for July.

Just released…

Our monthly report for July 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 July

Trading the period of seasonal volatility ahead

Gold

The Summer Rally

Bond market hanging in and still looking good for when positive tendencies resume mid-July

Strongest gains for Treasury Bond Prices have historically occurred around the start of rate cutting cycles

Ongoing inversion of the yield curve

Inflationary pressures breaking down

Yield-Dollar correlation cracking

Opportunities outside of the US

Looking favourably on Emerging Markets

Copper

Consumer becoming increasingly discerning heading into the summer

Retailers continue to drown in inventories

The industrial economy is feeling the support from the Artifical Intellidence (AI) boom

Looking to defend against third quarter equity market volatility with Defense

Health care remains the correct prescription for summer portfolios

Bad Breadth

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 July

Notable Stocks and ETFs Entering their Period of Strength in July

Subscribers can look for this 111-page report in their inbox and 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 July, today we release our screen of all of the stocks that have gained in every July 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 seventh 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 bullish at 0.90.