Stock Market Outlook for April 3, 2025
The rotation that benefited stocks outside of the US during the first quarter is under scrutiny as the All-Country World ex-US index carves out double-top 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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AeroVironment Inc. (NASD:AVAV) Seasonal Chart
Novartis A G (NYSE:NVS) Seasonal Chart
AerCap Holdings NV (NYSE:AER) Seasonal Chart
Capital Southwest Corp. (NASD:CSWC) Seasonal Chart
Putnam Managed Muni Incm (NYSE:PMM) Seasonal Chart
Patterson Metals Corp. (TSXV:PAT.V) Seasonal Chart
The Markets
Stocks flipped higher on Wednesday as investors neutralized negative bets ahead of the widely scrutinized US tariff announcement that took place after the closing bell. The S&P 500 Index closed higher by two-thirds of one percent, continuing to trade off of short-term horizontal support that was confirmed on Monday around 5500. The benchmark remains in a precarious state heading into the second quarter, holding levels below the 200-day moving average, a variable hurdle that traditionally provides a reasonable dividing line between long-term bullish and bearish trends. A check-back of the now declining resistance at the 50-day moving average (~5900) has been our base case, but headline risks have to be contended with in the very near-term. We are still in this period of seasonal strength that runs into the month of April, therefore there is a bias to give this favourable timeframe the benefit of the doubt; the more likely time to see a resumption of the declining intermediate-term path for stocks is through the off-season that starts in May. We have not made any changes to our Super Simple Seasonal Portfolio, yet, following our tactical positioning to take advantage of the positivity that surrounds the end of the quarter, but we are cognizant that the intermediate-term trajectory (most importance to us in our work) is becoming increasingly threatened. 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:
- The reversals in the bond market and small-caps from some near-term levels of support on Wednesday
- The double-top on the All Country World ex-US ETF
- US Vehicle Sales
- The recessionary path that heavy truck sales are showing
- How to play the Auto stocks in this backdrop
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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