Stock Market Outlook for March 20, 2025
Consumers still unwilling to take on debt in this high cost of borrowing environment, but they are relying on the equity in their homes to stay afloat and bridge the gap in their finances.
*** 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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Nuveen S&P 500 Dynamic Overwrite Fund (NYSE:SPXX) Seasonal Chart
ALPS REIT Dividend Dogs ETF (AMEX:RDOG) Seasonal Chart
RBC Bearings Inc. (NYSE:RBC) Seasonal Chart
Kimbell Royalty Partners, LP (NYSE:KRP) Seasonal Chart
Four Corners Property Trust, Inc. (NYSE:FCPT) Seasonal Chart
Trican Well Service Ltd. (TSE:TCW.TO) Seasonal Chart
Axalta Coating Systems Ltd. (NYSE:AXTA) Seasonal Chart
TransAct Technologies, Inc. (NASD:TACT) Seasonal Chart
Star Gas Partners L P (NYSE:SGU) Seasonal Chart
Caleres, Inc. (NYSE:CAL) Seasonal Chart
KBR Inc. (NYSE:KBR) Seasonal Chart
Precision Drilling Corp. (TSE:PD.TO) Seasonal Chart
iShares S&P/TSX Capped Energy Index ETF (TSE:XEG.to) Seasonal Chart
The Markets
Stocks rebounded on Wednesday as the Fed held rates steady and as the committee pledged to the two cuts that are expected by the end of 2025. The S&P 500 Index closed up by 1.08%, offsetting the decline posted in the prior session, but remaining below support around the 200-day moving average (5746). The benchmark continues to move above short-term declining trendline resistance from the past month as the recovery from the oversold lows of last week progresses. A check-back of the now declining resistance at the 50-day moving average (5928) 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 were broken during the correction, 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:
- US Housing Starts and the seasonal trade in the homebuilding stocks
- Consumer loan activity
- The strongest start to the year for home equity lines of credit since the Great Financial Crisis
- Canada Consumer Price Index (CPI) and the changing dynamics that have materialized in the inflation fight
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.87.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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