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Stock Market Outlook for June 12, 2013

Todays_Markets

Upcoming US Events for Today:

  1. Weekly Crude inventories will be released at 10:30am.
  2. The Treasury Budget for May will be released at 2:00pm. The market expects -$110.0B versus $112.9B previous.

 

Upcoming International Events for Today:

  1. German CPI for May will be released at 2:00am EST. The market expects a year-over-year increase of 1.7% versus 1.5% previous.
  2. Great Britain Labour Market report for May will be released at 4:30am EST. The market expects the claimant count to decline by 5,500 versus a decline of 7,300 previous. The unemployment rate is expected to remain unchanged at 7.8%.
  3. Euro-Zone Industrial Production for April will be released at 5:00am EST. The market expects a year-over-year decline of 0.7% versus a decline of 1.7% previous.

 

Recap of Yesterday’s Economic Events:

Event Actual Forecast Previous
JPY Bank of Japan Rate Decision 0.10%   0.10%
JPY Machine Tool Orders (YoY) -7.40%   -23.60%
GBP Industrial Production (MoM) 0.10% 0.00% 0.70%
GBP Industrial Production (YoY) -0.60% -0.60% -1.40%
GBP Manufacturing Production (MoM) -0.20% -0.20% 1.10%
GBP Manufacturing Production (YoY) -0.50% -0.30% -1.40%
USD NFIB Small Business Optimism 94.4 92.1 92.1
USD Wholesale Inventories 0.20% 0.20% 0.30%
USD Wholesale Sales (MoM) 0.50% -0.10% -1.40%
USD JOLTs Job Openings 3757 3875 3875
GBP NIESR Gross Domestic Product Estimate 0.60%   1.00%
JPY Machine Orders (MoM) -8.80% -8.10% 14.20%
JPY Machine Orders (YoY) -1.10% -4.30% 2.40%

 

The Markets

Markets traded lower on Tuesday, weighed down by ongoing concerns pertaining to the conclusion of monetary stimulus. The S&P 500 continues to show resistance at its 20-day moving average, also equivalent to the lower limit of the rising trend channel that stretched back to the mid-November low. Tuesday’s decline is charting early indications of a lower high on the daily chart and the 20-day moving average is showing early indications of curling lower. Recent positive momentum that was ubiquitous in the early half of May has clearly faded. A definitive break below the 50-day moving average combined with a break below the recent low of 1598 would provide confirmation that the long awaited correction is upon us. Seasonally, June is one of the weakest months of the year for equity markets, a trend that is seemingly playing out again this year. Weakness through mid-month typically leads to buying opportunities for the positive tendencies surrounding the independence day holiday, as well as the start of second quarter earnings season. Stay tuned!

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One of the indicators that we follow is the NYSE Summation Index, which provides an indication of breadth. The index has moved substantially lower since the mid-May peak, indicative of building weakness within the market. Declines in this index over the past few weeks are comparable to the last four equity market corrections, which resulted in an average loss of 12% for the S&P 500 index. As of present, the market is a mere 3.6% off from the recent high. The weight of the market is building.

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Seasonal charts of companies reporting earnings today:

AGYS SHIP OCC AOI CFI HRB LUB MW PVH

Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.04.

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S&P 500 Index

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Chart Courtesy of StockCharts.com

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TSE Composite

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Chart Courtesy of StockCharts.com

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Horizons Seasonal Rotation ETF (TSX:HAC)

  • Closing Market Value: $13.23 (down 0.23%)
  • Closing NAV/Unit: $13.23 (down 0.10%)

Performance*

2013 Year-to-Date Since Inception (Nov 19, 2009)
HAC.TO 4.04% 32.3%

* performance calculated on Closing NAV/Unit as provided by custodian 

Click Here to learn more about the proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux, Brooke Thackray, and Jon Vialoux.

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