Stock Market Outlook for August 7, 2026
The change in jobless claims hints of a stronger than average performance in July payrolls.
*** 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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Five Below, Inc. (NASD:FIVE) Seasonal Chart
Vanguard FTSE Canadian High Dividend Yield Index ETF (TSE:VDY.TO) Seasonal Chart
iShares Canadian Select Dividend Index ETF (TSE:XDV.TO) Seasonal Chart
Avidbank Holdings Inc. (NASD:AVBH) Seasonal Chart
Arcus Biosciences, Inc. (NYSE:RCUS) 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
Investors continue to digest early weeks gains, waiting for the outcome of the next major market catalyst via the monthly payroll report. The S&P 500 Index, again, shed less than two-tenths of one percent, continuing to hold above the consolidation span that the benchmark had 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 (~7489) was broken 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. Almost in an instant, the market has taken away every technical argument that the bears had been holding onto amidst the momentum/growth unwind over the past couple of months and the bias for stocks has to be placed on the upside. 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 view 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:
- Investor Sentiment Conducive to the Ongoing Grind Higher in Stocks
- Manufacturing Strength Driving the Labor Market
- A look ahead at what to expect from July’s Nonfarm payroll report
- Interest Rates and the U.S. Dollar Remain the Biggest Risks
- Momentum Stocks Are Re-Entering Leadership: The technicals of some of the most popular stocks in the market
- Risk Management Still Matters
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Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.86.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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