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Stock Market Outlook for July 10, 2019


Re-emergence of the FANG trade suggests improving risk sentiment.

 

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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Acorn International (NYSE:ATV) Seasonal Chart

Acorn International (NYSE:ATV) Seasonal Chart

 

 

The Markets

Stocks eked out minor gains on Tuesday as investors position for the upcoming earnings season.  The S&P 500 Index added just over a tenth of one percent, continuing to consolidate above previous resistance at 2950.  Among the notable winners were FANG (Facebook, Amazon, Netflix, and Google) as the momentum trade sees new life.  The widely popular set of stocks has shown leading implications in the past, peaking or toughing before the broad market.  It was in July of last year that FANG started to experience problems, eventually confirming a peak that led into the weakness for the broader market through the fourth quarter.  The re-emergence of strength in these momentum names bodes well for risk-sentiment overall. 

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Amazon.com, Inc. (NASD:AMZN) Seasonality

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Seasonal profiles for:

Meanwhile, while evidence re-emerges of investor risk taking, the crowded defensive trade is showing signs of struggle.  Consumer staples, utilities, and REITs have underperformed the S&P 500 Index over the past month.  So too have treasury bond prices, an area that investors have flocked to throughout the first half of the year amidst doubts over the rebound in broad equity market gauges.  Financials, technology, and consumer discretionary have taken the position as the market outperformers.  Positive risk sentiment is typically conducive to broad equity market strength.

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On the economic front, the headline print of May’s Job Openings and Labor Turnover Survey (JOLTS) indicated that openings fell by 49,000 to 7.323 million. Analysts were expecting an increase of 28,000 to 7.400 million. To put the level into perspective, 5.888 million individuals were consider unemployed in May, indicating that at least one job was available for everyone that is actively looking for one. Stripping out the seasonal adjustments, openings actually declined by 509,000 in May, or 6.6%, which is actually better than the 8.7% decline that is average for this time of year. Year-to-date, openings are higher by 4.5%, which is well short of the 19.9% increase that is average through this point in the year.  We sent out further analysis to subscribers.  Sign up now to be included on future distributions.

Job Openings: Total Nonfarm Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended close to neutral at 0.94.

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Seasonal charts of companies reporting earnings today:

AAR Corp. (AIR) Seasonal Chart AngioDynamics, Inc. (ANGO) Seasonal Chart Bed Bath & Beyond Inc. (BBBY) Seasonal Chart EXFO Inc (EXFO) Seasonal Chart MSC Industrial Direct Company, Inc. (MSM) Seasonal Chart PriceSmart, Inc. (PSMT) Seasonal Chart Simulations Plus, Inc. (SLP) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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