Stock Market Outlook for May 23, 2025
The trends of existing home sales and weekly jobless claims suggest strains in the economy as consumers and businesses battle the high cost of borrowing and general uncertainty pertaining to demand (tariffs).
*** 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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Realty Income Corp. (NYSE:O) Seasonal Chart
Lifeway Foods, Inc. (NASD:LWAY) Seasonal Chart
RH (NYSE:RH) Seasonal Chart
Brixmor Property Group Inc. (NYSE:BRX) Seasonal Chart
NIO Inc. (NYSE:NIO) Seasonal Chart
Patriot Battery Metals Inc. (TSE:PMET.TO) Seasonal Chart
The Markets
Thursday’s mid-day rally attributed to the passage of the tax bill by Republican House representatives fizzled out by the close as investors grapple with concerns pertaining to the deficit, along with the rising cost of borrowing. The large-cap benchmark closed down by four basis points (0.04%), continuing to react to a band of resistance between 5900 and 6100, effectively the all-time highs. The short-term rising trend stemming from the April lows remains that of higher-highs and higher-lows, but a break of the 50-hour moving average during Wednesday’s session suggests that the good times have come to an end and a digestive period heading into the end of the second quarter is commencing. Upside gap support around 5700 is the critical level to watch over the short-term timeframe given a violation of the implied level of support would lead to a resumption of the strains that the intermediate-term trend have been portraying since the start of the year. We continue to like the way our list of candidates in the market to Accumulate or to Avoid is positioned and we remain on the lookout for new opportunities, either on the long or short side, heading through this off-season for stocks. On the seasonal timeline, the foreseeable threat to stocks is the mean reversion move lower that is common through the middle of June as quarter-end portfolio rebalancing is enacted. It is possible that the catalyst of rising yields is kick-starting this normal tendency for declines slightly earlier than average. In the meantime, the Super Simple Seasonal Portfolio is effectively mitigating the stresses leaching into the market, maintaining the appropriate risk profile given the fundamental influences of the day and the seasonal dynamics that play out between May and October.
Today, in our Market Outlook to subscribers, we discuss the following:
- US Existing Home Sales and the impact on prices
- Weekly jobless claims and the health of the labor market
- The change in Natural Gas stockpiles and the seasonal trade in the commodity
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for May 23
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Sentiment on Thursday, as gauged by the put-call ratio, ended slightly bullish at 0.94.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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