Stock Market Outlook for October 23, 2024
Homebuilding stocks seasonally flourish between now and the spring, but the technicals and fundamentals are not providing the setup to be excited by this trade.
*** 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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Vanguard S&P Mid-Cap 400 ETF (NYSE:IVOO) Seasonal Chart
SPDR S&P 600 Small Cap Growth ETF (NYSE:SLYG) Seasonal Chart
Vanguard Materials ETF (NYSE:VAW) Seasonal Chart
SPDR S&P Semiconductor ETF (NYSE:XSD) Seasonal Chart
Wolfspeed, Inc. (NYSE:WOLF) Seasonal Chart
Invesco S&P 500 Equal Weight Consumer Discretionary ETF (NYSE:RSPD) Seasonal Chart
State Street Corp. (NYSE:STT) Seasonal Chart
Open Text Corp. (TSE:OTEX.TO) Seasonal Chart
Monster Beverage Corp. (NASD:MNST) Seasonal Chart
Knight-Swift Transportation Holdings Inc. (NYSE:KNX) Seasonal Chart
Reliance Steel & Aluminum (NYSE:RS) Seasonal Chart
Johnson Controls Intl plc (NYSE:JCI) Seasonal Chart
ON Semiconductor Corp. (NASD:ON) Seasonal Chart
Sierra Metals Inc.. (TSE:SMT.TO) Seasonal Chart
Wheaton Precious Metals Corp. (TSE:WPM.TO) Seasonal Chart
The Markets
Stocks ended marginally lower on Tuesday as the recent uptick in yields and appreciation of the US dollar kept pressure on equity prices. The S&P 500 Index closed down by a mere five basis points (0.05%), remaining stuck below short-term resistance at 5870. Support continues to be pinned at previous resistance of 5669, along with the 20-day moving average that is hovering around 5780. Despite evidence of waning upside momentum as we move past the period of seasonal volatility for stocks, this market is showing greater evidence of support than resistance, a characteristic of a bullish trend. We continue to like the groups that are on our growing list of Accumulate candidates, but there are certainly segments of the market to Avoid. The ability of the market, as a whole, to overcome the period of seasonal weakness for stocks rather unscathed is certainly telling of the relentless demand that has supported the benchmark, despite the fact that the risk-reward, broadly, is not very attractive. The start of the best six months of the year for stocks is slated to begin next week and there is a need from a seasonal perspective to ramp up risk exposure at some point.
Today, in our Market Outlook to subscribers, we discuss the following:
- US Housing Starts and the seasonal trade in the homebuilding stocks
- Consumer Loan activity
- Delinquency rate on loans
- The multi-year low level of credit spreads
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Sentiment on Tuesday, as gauged by the put-call ratio, ended close to Neutral at 0.98.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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