Stock Market Outlook for March 13, 2025
Selling exhaustion in the Technology sector becoming evident as end-of-quarter mean reversion starts to take hold.
*** 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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WisdomTree New Economy Real Estate Fund (NYSE:WTRE) Seasonal Chart
iShares MSCI EAFE ESG Optimized ETF (NASD:ESGD) Seasonal Chart
Target Hospitality Corp. (NASD:TH) Seasonal Chart
Sitio Royalties Corp. (NYSE:STR) Seasonal Chart
MongoDB, Inc. (NASD:MDB) Seasonal Chart
iShares Currency Hedged MSCI EAFE Small-Cap ETF (AMEX:HSCZ) Seasonal Chart
Ship Finance Intl Ltd. (NYSE:SFL) Seasonal Chart
Invesco DWA Developed Markets Momentum ETF (NASD:PIZ) Seasonal Chart
iShares International Developed Real Estate ETF (NASD:IFGL) Seasonal Chart
iShares MSCI EAFE Growth ETF (NYSE:EFG) Seasonal Chart
SAP SE (NYSE:SAP) Seasonal Chart
The Markets
Stocks found a bit of stability on Wednesday as investors took a stab at some of the beaten down technology names from the past few weeks. The S&P 500 Index gained just less than half of one percent, remaining below support around the 200-day moving average (5737). The benchmark continues to sit around the furthest below this long-term hurdle since 2022. A declining short-term trend remains intact. A simple sign to suggest that the market is moving beyond this short-term declining path is if the benchmark is able to close above the high of the prior day, something that has not been seen since February 19th. At some point, a checkback of the now declining resistance at the 50-day moving average (5957) is reasonable and likely, at which point the true health of the intermediate-term trajectory of stocks can be determined. Markets that are showing greater resistance than support must be avoided, a framework, on an intermediate-term scale, we have not seen yet. Momentum indicators on the daily chart have negatively diverged from price since the middle of last year, highlighting the waning enthusiasm investors had been expressing towards tech-heavy (Mag-7) benchmarks, like this, amidst extreme valuations. For now, the drawdown in the market can still be viewed as healthy and ordinary within a bull market, by any measure, but scrutiny is certainly warranted now that some critical levels are being lost, such as 5700 on the S&P 500. Below this threshold, more dire scenarios for risk assets must be considered. We continue to monitor the potential impact of the apparent rotation in the market on our list of candidates in the market to Accumulate and to Avoid and we have adopted more of a neutral stance as segments that were previously noted as Accumulate candidates fall off (eg. Technology) and as areas to Avoid are added.
Today, in our Market Outlook to subscribers, we discuss the following:
- Evidence of selling exhaustion in Technology and the action we are taking in the Super Simple Seasonal Portfolio
- US Consumer Price Index (CPI) and the investment implications within
- The upside risks to oil and gas prices as imports falter in this tariff war
- Oil supply and demand
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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