Stock Market Outlook for May 8, 2023
While full-time hiring in Canada is still upbeat, employers are showing reluctance switching part-time employees over to full-time ahead of the typically busy summer season.
*** 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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Tennant Co. (NYSE:TNC) Seasonal Chart
America’s Car-Mart, Inc. (NASD:CRMT) Seasonal Chart
Middlesex Water Co. (NASD:MSEX) Seasonal Chart
Invesco Dynamic Large Cap Growth ETF (NYSE:PWB) Seasonal Chart
Vanguard U.S. Total Market Index ETF (CAD-hedged) (TSE:VUS.TO) Seasonal Chart
iShares 20+ Year Treasury Bond ETF (NASD:TLT) Seasonal Chart
Invesco Dynamic Biotechnology & Genome ETF (NYSE:PBE) Seasonal Chart
iShares Core US Growth ETF (NASD:IUSG) Seasonal Chart
iShares U.S. Pharmaceuticals ETF (NYSE:IHE) Seasonal Chart
VanEck Vectors Biotech ETF (NASD:BBH) Seasonal Chart
Independence Realty Trust, Inc. (NYSE:IRT) Seasonal Chart
American States Water Co. (NYSE:AWR) Seasonal Chart
Intuitive Surgical, Inc (NASD:ISRG) Seasonal Chart
The Markets
Stocks jumped on Friday as traders found relief in the stronger than expected payroll report for the month of April. The S&P 500 Index closed higher by 1.85%, bouncing from the congestion of major moving averages between 3950 and 4050 that was tested in the previous session. The range of resistance between 4100 and 4200 remains daunting overhead as momentum around this barrier continues to fade. The large-cap benchmark remains on a MACD sell signal that was triggered on the 25th of April and the benchmark has essentially just drifted sideways over the past couple of weeks now that the vast majority of companies have reported earnings. Friday marked the average peak to the best six month of the year trend for stocks that started in October and, sure enough, the result was strong with the S&P 500 Index higher by 15.4% since the middle of October; performance over the next six months, while typically not negative, tends to pale in comparison to the six month period that preceded it. Reducing risk in portfolios during the spring when equity market volatility is low and increasing risk when summer volatility peaks has traditionally delivered alpha to portfolios and it appears reasonable to expect a similar outcome this year as well.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Risk-off period for stocks does not mean opportunities in the equity market do not exist
- US Employment Situation and the ongoing above average change of wages
- Canada Labour Force Survey and the bias that employers are showing towards part-time employees
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for May 8
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Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.96.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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