Stock Market Outlook for February 1, 2023
*** 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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Allstate Corp. (NYSE:ALL) Seasonal Chart
WW Grainger, Inc. (NYSE:GWW) Seasonal Chart
Progressive Corp. (NYSE:PGR) Seasonal Chart
1-800 FLOWERS.COM, Inc. (NASD:FLWS) Seasonal Chart
Ero Copper Corporation (TSE:ERO.TO) Seasonal Chart
The Markets
Stocks gained to close out the month of January as investors continue to neutralize negative bets ahead of month-end reporting, the upcoming FOMC announcement, and the ongoing release of earnings reports. The S&P 500 Index ended higher by 1.46%, erasing the loss that was realized to start the week. The large-cap benchmark remains above former declining trendline resistance, but below the highs set in the month of December at 4100, presenting a critical line in the sand that is keeping the path of lower-highs on an intermediate to long-term basis intact. Momentum indicators continue to show early signs of rolling over with the MACD histogram increasingly narrowing back towards 0. The technical framework to the market continues to give bias to a neutral view and we are waiting for the trend to evolve to suggest either and bullish of bearish mentality for the months ahead.
For the month ahead, the S&P 500 Index has averaged an unchanged (0.0%) result in February over the past two decades, however, 60% of the periods have shown a positive outcome. Returns have ranged from a loss of 11.0% in February of 2009 to a gain of 5.5% in February of 2015. The softer period for equity market performance concludes around the start of March before the spring uptick in prices attributed to Investment Retirement Account (IRA) contributions begins. We break down everything to look for in the month ahead in our just released monthly report for February. Subscribe now.
Just Released…
Our 92-page monthly report for February is out, providing everything that you need to know for the month(s) ahead.
Highlights in this report include:
- Equity market tendencies in the month of February
- Investors not upbeat about the year ahead
- Using the Yield Curve as a coincident indicator to a recessionary market decline
- Analysts are too optimistic and this is good news for the bond market
- Credit spreads providing indication of alleviating strains, but a recession would certainly change that
- The ultimate coincident indication of economic activity: Jobless Claims
- Market versus the Fed
- Consumer has definitively cashed out
- Existing Home Sales
- Manufacturers not optimistic either
- Tightening lending standards
- Not helping industrials is the downfall of the shipping economy
- Inflationary pressures remain an ongoing concern and could re-flare through the months ahead
- Forecasted general direction of stocks in 2023
- Dow Jones Industrial Average and NYSE Composite back to the 2022 breakdown points
- Sustainability of this year’s strength of domestic equities in question
- Dollar remains key to the market
- Bonds
- Lower yields versus a stronger dollar
- If you can’t find any love at home, go elsewhere
- Strength in International equities correlates well with strength in Gold
- Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs
- Positioning for the months ahead
- Sector Reviews and Ratings
- Stocks that have Frequently Gained in the Month of February
- Notable Stocks and ETFs Entering their Period of Strength in February
Subscribers can look for this report in their inbox.
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Today, in our Market Outlook to subscribers, we discuss the following:
- Monthly look at the large-cap benchmark
- US Home Prices
- Canada Gross Domestic Product and some of the cheapest stocks in the market with fundamental tailwinds behind them
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for February 1
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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