Stock Market Outlook for March 28, 2025
The US Trade Deficit remains at an extreme as businesses seek to front-run the imposition of tariffs.
*** 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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China Yuchai Intl Ltd. (NYSE:CYD) Seasonal Chart
Sohu.com Ltd. (NASD:SOHU) Seasonal Chart
Lassonde Industries, Inc. (TSE:LAS/A.TO) Seasonal Chart
Light & Wonder Inc. (NASD:LNW) Seasonal Chart
Meta Platforms, Inc. (NASD:META) Seasonal Chart
Summit Midstream Partners, LP (NYSE:SMC) Seasonal Chart
Portage Biotech Inc. (NASD:PRTG) Seasonal Chart
Westshore Terminals Investment Corp. (TSE:WTE.TO) Seasonal Chart
PennantPark Investment Corp. (NYSE:PNNT) Seasonal Chart
Western Asset Global High Income Fund Inc. (NYSE:EHI) Seasonal Chart
NN, Inc. (NASD:NNBR) Seasonal Chart
Service Corp. (NYSE:SCI) Seasonal Chart
NetEase.com, Inc. (NASD:NTES) Seasonal Chart
The Markets
Stocks showed difficulty shaking off the negative sentiment that was derived from the announcement of auto tariffs on Wednesday, but end of quarter re-balancing is working to mitigate a more negative outcome for the time being. The S&P 500 Index slipped by a third of one percent, charting a rather indecisive doji candlestick on the day below long-term support around the 200-day moving average (5757). The benchmark continues to intersect with levels around Monday’s upside gap (~5700) that we have identified as support, providing an important test in this rebound attempt in the market that has materialized in the back half of March; a break of the short-term pivot point would lead to the suggestion that the near-term oversold bounce in the market into quarter-end has reached a peak, resuming what is becoming a declining intermediate-term trajectory stemming off of February’s highs. A check-back of the now declining resistance at the 50-day moving average (5907) remains our base case, at which point the true health of the intermediate-term trajectory of stocks can be determined, but we must be nimble with this target so long as headline risks remain elevated. Markets that are showing greater resistance than support over an intermediate-term timeframe must be avoided, a framework we have not been able to confirm, yet. As we scrutinize the strength of the oversold bounce, 5748 is an important level to watch given that it represents the 38.2% Fibonacci retracement level of the February/March pullback; the inability for the benchmark to get above this hurdle on this bounce would characterize a very weak recovery and indicative of a market that wants to move lower, below the lows that were charted around 5500. We are still in this period of seasonal strength that runs through the end of March and into the month of April, therefore there is a bias to give this favourable timeframe the benefit of the doubt; the more likely time to see a resumption of the declining intermediate-term path for stocks is through the off-season that starts in May. We continue to monitor the potential impact of the apparent rotation in the market on our list of candidates in the market to Accumulate and to Avoid and we have adopted more of a neutral stance as segments that were previously noted as Accumulate candidates fall off (eg. Technology) and as areas to Avoid are added.
Today, in our Market Outlook to subscribers, we discuss the following:
- The US Trade Deficit at an extreme
- Shipping Volumes and Expenditures in the US
- Baltic Dry Index
- The weak performance of the Dow Jones Transportation Average and the downfall of Courier stocks
- The trend of Business Applications amidst the tariff uncertainty
- Weekly Jobless Claims and the health of the labor market
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Sentiment on Thursday, as gauged by the put-call ratio, ended close to neutral at 0.92.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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