Stock Market Outlook for May 5, 2025
Everything outside of the US is breaking out as equity investors rotate to other countries around the globe with greater certainty.
*** 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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McKesson Corp. (NYSE:MCK) Seasonal Chart
WD-40 Co. (NASD:WDFC) Seasonal Chart
Digi Intl Inc. (NASD:DGII) Seasonal Chart
Health Care Select Sector SPDR Fund (NYSE:XLV) Seasonal Chart
Match Group, Inc (NASD:MTCH) Seasonal Chart
Centerspace (NYSE:CSR) Seasonal Chart
XP Inc (NASD:XP) Seasonal Chart
Alphabet Inc. (NASD:GOOGL) Seasonal Chart
Vanguard Health Care ETF (NYSE:VHT) Seasonal Chart
Royal Gold, Inc. (NASD:RGLD) Seasonal Chart
MSCI, Inc. (NYSE:MSCI) Seasonal Chart
Barings BDC, Inc. (NYSE:BBDC) Seasonal Chart
iShares MSCI USA Momentum Factor ETF (AMEX:MTUM) Seasonal Chart
NV5 Global, Inc. (NASD:NVEE) Seasonal Chart
Virco Manufacturing Corp. (NASD:VIRC) Seasonal Chart
Gildan Activewear, Inc. (NYSE:GIL) Seasonal Chart
Novavax, Inc. (NASD:NVAX) Seasonal Chart
The Markets
Headlines that China is evaluating the possibility of starting trade negotiations with the US lit a fire under the equity market on Friday. The S&P 500 Index added 1.47%, moving beyond the declining 50-day moving average (5582) and reaching back towards the 200-day average (5746). There remains an implied cap over this market in the range between 5500 and 5800, corresponding to the upper limit of the cloud of major moving averages that was broken in March, that would likely require a catalyst to break (eg. progress towards a trade deal with China); without one, look for the sellers to step in around this zone. Indecision candlesticks around the declining 50-day moving average on Wednesday and Thursday lent itself to the suggestion of hesitation among investors, but the incremental positivity received from China’s announcement is placing the short-term recovery from the April lows into extra innings. We were enticed to use the strength over the past couple of sessions to start legging out of equity allocations heading into the offseason for stocks that begins at this time of year as we brace for the next evolution of the intermediate-term trend in the equity market that is still leaning negative. We continue to monitor the potential impact of the rotation in the market on our list of candidates in the market to Accumulate and to Avoid, but we have found rotation/buying candidates in recent weeks amidst this market tumult.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark and the key levels to scrutinize overhead
- All Country Ex-US breaking out to new highs
- The action that we are taking in the Super Simple Seasonal Portfolio
- US Employment Situation and the investment implications within
- The emerging lag in the path of wages
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Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.84.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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