Stock Market Outlook for August 5, 2026
Upside targets in the Technology (XLK), Materials (XLB), and Industrial (XLI) sectors following recent bullish developments.
*** 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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HCI Group, Inc. (NYSE:HCI) Seasonal Chart
Business First Bancshares, Inc. (NASD:BFST) Seasonal Chart
Cass Commercial Corp. (NASD:CASS) Seasonal Chart
Disclaimer: Comments and opinions offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered is believed to be accurate, but is not guaranteed.
The Markets
A return of demand for core-cyclical (materials, industrials, financials) and technology stocks was sufficient to drive equity benchmarks to record heights on Tuesday. The S&P 500 Index added 1.79%, definitively resolving the consolidation span that the benchmark has been within since the start of June between 7250 and 7620; previous resistance at this upper threshold now turns into support. Implied resistance around 20 and 50-day moving averages (~7481) was broken toward the end of last week, placing the ball in the bulls court heading into the start of the new month. Daily momentum indicators have started to curl higher again and MACD has triggered a fresh buy signal. In the Seasonal Advantage Portfolio that we manage for clients at CastleMoore, we never made any changes in our allocations following the abnormal July weakness. Following a first half performance in the Seasonal Advantage Portfolio that was well ahead of our own benchmark (as well as all major equity benchmarks in the market), we have had a bias to expect strength for the start of the second half of the year, aligning with the optimism that the manufacturing economy is expressing. Our stance is now paying off. Earnings season has provided the cover to the headline threats in the market and, ultimately, the positive intermediate-term trajectory of the market persists. Subscribers can view what we are targeting in our list of market segments to either Accumulate or Avoid.
Today, in our Market Outlook to subscribers, we discuss the following:
- Technology (XLK), Materials (XLB), and Industrial (XLI) sectors, along with their upside targets
- Job Openings and Labor Turnover Survey (JOLTS)
- US Factory Orders and the segments of the manufacturing economy that are thriving
- Investor sentiment leaning back towards complacency
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Sentiment on Tuesday, as gauged by the put-call ratio, ended overly bullish at 0.69.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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