Stock Market Outlook for June 26, 2024
Biotechnology breaking out as the period of seasonal strength gets underway.
*** 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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Tempur-Pedic Intl Inc. (NYSE:TPX) Seasonal Chart
Fidelity National Financial, Inc. (NYSE:FNF) Seasonal Chart
CrossAmerica Partners LP (NYSE:CAPL) Seasonal Chart
The Markets
Stocks rebounded on Tuesday as the mean-reversion that had been playing out between this quarter’s winners and laggards took a breather. The S&P 500 Index closed higher by nearly four-tenths of one percent, driven by many of the growth leaders (eg. semiconductors) that had carried the broader market to recent heights. Moving averages are maintaining a positive trajectory, “flaring” out above one another and presenting many points of support below should a correction commence. This is characteristic of a bullish trend and, despite recent signs of exhaustion in some of the market leaders, the setup is favourable for the summer rally timeframe that traditionally spans the next few weeks. One more session remains in the normal portfolio re-balance/mean-reversion timeframe before the window-dressing phase in the last couple of sessions provides a lift to prices before the new month and quarter gets underway. We may have seen a bit of this window-dressing phenomenon on Tuesday as investment managers pad their portfolios with those segments of the market that have performed well before they are required to report their allocations once the calendar flips to the new month.
Today, in our Market Outlook to subscribers, we discuss the following:
- The breakout of Biotech, how to gain exposure, and the upside target that we see of this industry
- The rapid rise of home prices in the US
- Canada Consumer Price Index (CPI) and what is driving the surge in the inflation gauge
- Canadian Dollar
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Sentiment on Tuesday, 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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