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Stock Market Outlook for June 24, 2019


Weekly chart of the S&P 500 Index showing bullish characteristics, however, the rise in the VIX at the end of the week suggest uncertainties remain.

 

Real Time Economic Calendar provided by Investing.com.

 

*** 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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Abbott Laboratories (NYSE:ABT) Seasonal Chart

Abbott Laboratories (NYSE:ABT) Seasonal Chart

Spirit Realty Capital, Inc. (NYSE:SRC) Seasonal Chart

Spirit Realty Capital, Inc. (NYSE:SRC) Seasonal Chart

ABC Bancorp (NASD:ABCB) Seasonal Chart

ABC Bancorp (NASD:ABCB) Seasonal Chart

Rollins, Inc. (NYSE:ROL) Seasonal Chart

Rollins, Inc. (NYSE:ROL) Seasonal Chart

MTY Food Group Inc. (TSE:MTY.TO) Seasonal Chart

MTY Food Group Inc. (TSE:MTY.TO) Seasonal Chart

Cintas Corp. (NASD:CTAS) Seasonal Chart

Cintas Corp. (NASD:CTAS) Seasonal Chart

Unilever N V (NYSE:UN) Seasonal Chart

Unilever N V (NYSE:UN) Seasonal Chart

 

 

The Markets

Stocks closed mildly lower on Friday as investors booked profits following another strong week for US equity benchmarks.  The S&P 500 Index shed just over a tenth of one percent, remaining pinned to the all-time high broken during Thursday’s session.  For the week, the large-cap benchmark added 2.20% as investors that were offside following the May swoon were forced to reallocate.  Major weekly moving averages continue to point higher, providing levels of support below, and momentum indicators continue to show bullish characteristics.  MACD just triggered new “buy” signal following a crossover of the signal line and hints that the market is moving past the consolidation range from the past year and a half are being seen.  Since the spring of last year, weekly bullish crossovers have come at lower levels than the one previous as momentum indicators negatively diverged from price.  The week’s crossover from a level above the bullish crossover charted in January suggests the end of the trend of lower-lows and lower-highs with respect to MACD and a trend of higher-highs and higher-lows is underway.  This is characteristic of a rising long-term trend in stocks.

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But along with the strength in the equity market, we’d be remised not to draw attention to the volatility index, which also closed higher on the week.  As the price of the broad market benchmark closed in on the previous high, the fear gauge started grinding higher, suggesting an elevation of option premiums and uncertainty.  The G20 meeting in the week ahead, brining together US and China trade delegations, likely has investors on edge.  Call options relative to puts has been upbeat over the past couple of sessions, therefore it may be that investors are choosing to define their risk and gain exposure to the upside by buying calls as opposed to being directly long.  Any revelations that would sustain this constrained optimism would force investors to take the direct exposure in the stocks, thereby fuelling markets higher.   This will undoubtedly be another pivotal week ahead as portfolio managers seek to close out the month, the quarter, and the first half of the year.

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On the economic front, a report on existing home sales was released during Friday’s session. The headline print indicated that activity increased by 2.5% in May to a seasonally adjusted annual rate of 5.34 million. Analysts were expecting a rate of 5.28 million. Stripping out the seasonal adjustments, the sales of existing homes actually increased by 18.4% in May, which is much stronger than the 10.6% increase that is average for this time of year. The year-to-date change now sits higher by a whopping 43.2%, which is 19.3% above average through the first five months of the year. This is the best pace that we have on record, which spans the past 20 years. Subscribe now to receive our full analysis on key economic events and the investment implications that follow.

Existing Home Sales Seasonal Chart

North of the border, Statscan indicates that retail sales in Canada increased by 0.1% in April, which is a miss versus expectations that called for a 0.5% rise. Stripping out the seasonal adjustments, retail trade in this country actually increased by 4.5% in May, which is slightly weaker than the 5.3% increase that is average for this time of year. The year-to-date change is now running 7.2% above the seasonal average trend into this spring period, which remains the best pace on record.  We sent out further insight to subscribers, including an update to our contention of upside risks for the Canadian Dollar.  Subscribe now.

Retail trade Seasonal Chart

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.76.

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Seasonal charts of companies reporting earnings today:

  • No significant earnings scheduled for today

 

S&P 500 Index

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TSE Composite

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