Stock Market Outlook for August 14, 2025
Bond prices are moving higher, but managed money is holding a near record short in treasury note futures.
*** 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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Kennametal, Inc. (NYSE:KMT) Seasonal Chart
Energy Recovery Inc. (NASD:ERII) Seasonal Chart
Community Trust Bancorp, Inc. (NASD:CTBI) Seasonal Chart
First Community Bancshares Inc. (NASD:FCBC) Seasonal Chart
Utah Medical Products, Inc. (NASD:UTMD) Seasonal Chart
Hancock Whitney Corp. (NASD:HWC) Seasonal Chart
The Markets
Stocks retained their positive tone from Tuesday’s rally as traders continue to anticipate the prospect of a central bank rate cuts ahead. The S&P 500 Index closed higher by around a third of one percent, punching out another fresh record high. Short-covering in a range of segments (eg. small-caps, transportation) that had started to roll over in recent weeks amidst the onset of the period of volatility for the market remain responsible for the positivity as traders question whether or not the erratic trading that stocks are known for at this time will be sustained. Momentum indicators have been rolling over from the most overbought levels since July of 2024, just prior to the volatility shock that evolved rapidly through the first week of August of last year. Despite the new highs in prices of equities, this is still the time of year to be on your toes given that August is upon us, a well known volatile period that sees equity markets destabilize from their summer strength; looking for opportunities to peel back risk in portfolios remains appropriate in order to mitigate the erratic moves that impacts stocks in the final months of the third quarter (August/September). The strategy remains to avoid being aggressive in risk (stocks) in the near-term, but take advantage of any volatility shocks (should they materialize) to increase the risk profile of portfolios ahead of the best six months of the year for stocks that gets underway in October. Our list of candidates in the market that are worthy to Accumulate or Avoid continues to be dialed in appropriately, keeping investors tuned into those segments of the market that are working according to our three-pronged approach incorporating seasonal, technical, and fundamental analysis.
Today, in our Market Outlook to subscribers, we discuss the following:
- The near record short allocation in treasury bond futures
- Equity investors testing the waters on segments of the market that have been burdened by the high cost of borrowing
- Energy supply and demand, as well as the sell the rumour, buy the news outcome that may surround this Friday’s meeting between Trump and Putin
- Investor Sentiment
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.74.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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