Stock Market Outlook for April 2, 2025
Health Care under renewed scrutiny as biotechnology stocks fall back to 52-week lows during this seasonally weak time of year.
*** 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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Liquidity Services Inc. (NASD:LQDT) Seasonal Chart
Ellington Financial Inc. (NYSE:EFC) Seasonal Chart
Cryo-Cell International Inc. (AMEX:CCEL) Seasonal Chart
LGI Homes, Inc. (NASD:LGIH) Seasonal Chart
The Markets
Stocks swung around the flat-line on Tuesday as investors braced for Wednesday’s much anticipated tariff announcement from the US president. The S&P 500 Index closed higher by nearly four-tenths of one percent, continuing to trade off of short-term horizontal support that was confirmed on Monday around 5500. The benchmark remains in a precarious state heading into the second quarter, holding levels below the 200-day moving average, a variable hurdle that traditionally provides a reasonable dividing line between long-term bullish and bearish trends. A check-back of the now declining resistance at the 50-day moving average (~5900) has been our base case, but headline risks have to be contended with in the very near-term. We are still in this period of seasonal strength that runs 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 have not made any changes to our Super Simple Seasonal Portfolio, yet, following our tactical positioning to take advantage of the positivity that surrounds the end of the quarter, but we are cognizant that the intermediate-term trajectory (most importance to us in our work) is becoming increasingly threatened. 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:
- No evidence of further degradation in equity market internals over the past few weeks
- Health care under scrutiny and the downfall of Biotechnology stocks
- Our lone Accumulate candidate in the health care sector
- Job Openings and Labor Turnover Survey (JOLTS) and the investment implications within
- The record setting pace of layoffs to start the year
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.82.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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