Stock Market Outlook for July 8, 2024
Economic momentum is waning, but this could be the catalyst for the third quarter rally in the bond market.
*** 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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Union First Market Bankshares Corp. (NYSE:AUB) Seasonal Chart
Premier Financial Corp. (NASD:PFC) Seasonal Chart
Financial Select Sector SPDR Fund (NYSE:XLF) Seasonal Chart
abrdn Physical Silver Shares ETF (NYSE:SIVR) Seasonal Chart
Bank Of America Corp. (NYSE:BAC) Seasonal Chart
Marcus Corp. (NYSE:MCS) Seasonal Chart
Nasdaq OMX Group Inc. (NASD:NDAQ) Seasonal Chart
Metlife, Inc. (NYSE:MET) Seasonal Chart
CF Industries Holdings, Inc. (NYSE:CF) Seasonal Chart
Goldman Sachs Group, Inc. (NYSE:GS) Seasonal Chart
Union Pacific Corp. (NYSE:UNP) Seasonal Chart
TFI International Inc. (TSE:TFII.TO) Seasonal Chart
Take-Two Interactive Software, Inc. (NASD:TTWO) Seasonal Chart
Fresh Del Monte Produce (NYSE:FDP) Seasonal Chart
Kinross Gold Corp. (NYSE:KGC) Seasonal Chart
The Markets
Stocks jumped higher on Friday, continuing to realize the benefit of summer rally timeframe. The S&P 500 Index ended higher by just over half of one percent, extending the bounce from the rising 20-day moving average (5452) and advancing beyond the 5555 target that the breakout of the consolidation span between 5445 and 5500 suggested. The summer rally engine is running strong as funds flow into many of the winners from the first half of the year, including Technology (XLK) and Communication Services (XLC), two segments of the market that tend to perform well seasonally ahead of the period of average volatility for stocks that gets underway in a couple of weeks from now. The 2.08% gain for the S&P 500 Index already far surpasses the 1.29% return that is average for the summer rally timeframe between June 27th and July 17th. Relative Strength Index (RSI) for the large-cap benchmark remains firmly embedded in overbought territory and MACD is back on the rise after breaking above declining trendline resistance in June. Despite poor breadth beneath the surface of the market, characteristics of a bullish trend are firmly entrenched as funds overwhelming plow into some of the few areas of the market that are actually working (see our list of Accumulate candidates). Major moving averages continue to “fan” out below price, providing a number of points of support below to catch prices should an event occur to destabilize the recent momentum. Seasonals and technicals suggest remaining bullish of stocks, but we will soon have to become cognizant of any triggers that may induce the period of average volatility for equity markets that follows and spans the remainder of the third quarter.
Today, in our Market Outlook to subscribers, we discuss the following:
- US Employment Situation and the investment implications within
- Canada Labour Force Survey and the unprecedented reliance on part-time employees
- The rise in resource employment
- The third strongest increase in Canadian unemployment over the past two decades
- Bonds
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Sentiment on Friday, as gauged by the put-call ratio, ended slightly bullish at 0.90.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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