Stock Market Outlook for October 24, 2024
Equity prices are vulnerable here as yields and the US Dollar Index reach up to levels of declining trendline resistance.
*** 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 Russell 2000 Growth ETF (NYSE:IWO) Seasonal Chart
iShares Semiconductor ETF (NASD:SOXX) Seasonal Chart
GMS Inc. (NYSE:GMS) Seasonal Chart
iShares Robotics and Artificial Intelligence ETF (AMEX:IRBO) Seasonal Chart
Big Pharma Split Corp (TSE:PRM.TO) Seasonal Chart
Cogeco, Inc. (TSE:CGO.TO) Seasonal Chart
Caterpillar, Inc. (NYSE:CAT) Seasonal Chart
Textron, Inc. (NYSE:TXT) Seasonal Chart
Dillards Inc (NYSE:DDS) Seasonal Chart
United Therapeutics Corp. (NASD:UTHR) Seasonal Chart
ABM Industries, Inc. (NYSE:ABM) Seasonal Chart
Honda Motor Co. Ltd. (NYSE:HMC) Seasonal Chart
Bristol Myers Squibb Co. (NYSE:BMY) Seasonal Chart
JD.com, Inc. (NASD:JD) Seasonal Chart
The Markets
Stocks dipped on Wednesday as the recent uptick in yields and appreciation of the US dollar keeps pressure on equity prices. The S&P 500 Index closed down by just over nine-tenths of one percent, pulling back towards short term support at the rising 20-day moving average (5783). In recent days, the benchmark has shown a cap at 5870, resulting in an ultra-short-term topping pattern that projects a downside target of 5745. Despite the one-day gyration, this market is showing greater evidence of support than resistance, a characteristic of a bullish trend. What is concerning to the prevailing path is the waning of upside momentum, something that we are seeing more evidence of with another MACD sell signal; the momentum indicators has shown a negative divergence versus price through the current calendar year, highlighting the fading enthusiasm towards the risk profile that equities encompass. The risk-reward, broadly, remains unattractive. We continue to like the groups that are on our growing list of Accumulate candidates, but there are certainly segments of the market to Avoid. The start of the best six months of the year for stocks is slated to begin next week and there is a need from a seasonal perspective to ramp up risk exposure at some point.
Today, in our Market Outlook to subscribers, we discuss the following:
- Yields and the US dollar reaching up to levels of declining trendline resistance
- The lack of invigoration of US Existing Home Sales from the abnormal rise in inventories and the decline in the cost of borrowing
- Consumers focused on the absolute levels of the cost of borrowing and the cost of living
- The fading trend of Earnings Per Share (EPS) expectations
- Market valuation and the lack of burden from the rise in the cost of borrowing
- Citigroup Economic Surprise Index
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.89.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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