Contact | RSS Feed

Stock Market Outlook for July 24, 2019


Yield on the S&P 500 Index and 10-Year Treasury note once again converging on one another.

 

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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Motorcar Parts of America Inc. (NASD:MPAA) Seasonal Chart

Motorcar Parts of America Inc. (NASD:MPAA) Seasonal Chart

ICF International Inc. (NASD:ICFI) Seasonal Chart

ICF International Inc. (NASD:ICFI) Seasonal Chart

Chubb Ltd. (NYSE:CB) Seasonal Chart

Chubb Ltd. (NYSE:CB) Seasonal Chart

Marlin Business Services Corp. (NASD:MRLN) Seasonal Chart

Marlin Business Services Corp. (NASD:MRLN) Seasonal Chart

 

 

The Markets

Stocks grinded higher on Tuesday as investors welcomed news that a US delegation would be travelling to China on Monday to continue trade negotiations.  The S&P 500 Index added almost seven-tenths of one percent, re-taking the psychologically important 3000 level.  Support at the rising 20-day moving average has remained intact, keeping the shorter-term trend of higher-highs and higher-lows intact.  Increasingly we are seeing evidence of a cyclical shift as investors look for value in some of the beaten down names.  Industrials, financials, and materials topped the leaderboard during Tuesday’s session, surpassing the performance of defensives, some of which traded lower on the day.  The industrial sector ETF (XLI) is up against a major line in the sand around $78.50.  Over the past year-and-a-half, each time the ETF has traded up to the level of horizontal resistance it has sold off rather sharply thereafter.  The pattern somewhat resembles an inverse head-and-shoulder pattern, the upside target of which points to a price of $96.  A breakout above resistance directly overhead would likely fuel a wave of buying pressures as investors reallocate back to the cyclical sector.  Seasonally, the industrial sector tends to decline through the remainder of the third quarter.

image

image

Industrials Sector Seasonal Chart

Recent performance in the equity and fixed income market has caused the yield on the S&P 500 Index and 10-Year Treasury note to once again converge on one another.  This has happened in three other instances in the past decade: the first in March of 2009, the second in November of 2012, and the last one in September of 2016.  Each instance led to demand for stocks, pushing prices higher, as the fixed income counterpart was less attractive from a yield perspective.  The yield on the intermediate treasury bond has generally been greater than the equity market yield for the past six decades, conducive to creating the bull market in bonds over the past three and a half decades as the yield spread between the two widened to historic levels.  The neutralization of the spread provides little incentive to be in the fixed income asset class around present levels.

image

On the economic front, the National Association of Realtors is indicating that sales of existing homes fell by 1.7% in June to a seasonally adjusted annualized rate of 5.27 million. Analysts were expecting a decline of 0.7% to a rate of 5.32 million. The year-over-year change is now indicated to be down by 2.2% versus the 0.7% decline indicated for May. Stripping out the adjustments, existing home sales in the US were actually lower by 2.8% in June, which is a negative divergence compared to the 8.3% increase that is average for this time of year. The year-to-date change is now higher by 39.8%, which is still firmly above the average increase for the first half of the year of 34.2%. This is the best pace since 2009.  We sent out further analysis on the state of the housing market, typically a leading indicator of the health of the broader economy, to subscribers on Tuesday.  Not signed up yet?  Simply navigate to https://charts.equityclock.com/subscribe and select your desired subscription option.

Existing Home Sales Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.75.  This is the second most bullish level of the year, introducing the prospect of complacency into the market.  Complacency accompanies risk as investors bet heavily on the upside potential without fully respecting the downside risks.

image

 

 

Seasonal charts of companies reporting earnings today:

Agnico Eagle Mines Limited (AEM) Seasonal Chart Alexion Pharmaceuticals, Inc. (ALXN) Seasonal Chart Align Technology, Inc. (ALGN) Seasonal Chart Allegiant Travel Company (ALGT) Seasonal Chart AMERIPRISE FINANCIAL SERVICES, INC. (AMP) Seasonal Chart Amphenol Corporation (APH) Seasonal Chart Anthem, Inc. (ANTM) Seasonal Chart AT&T Inc. (T) Seasonal Chart Boeing Company (The) (BA) Seasonal Chart Boston Scientific Corporation (BSX) Seasonal Chart Brink's Company (The) (BCO) Seasonal Chart Canon, Inc. (CAJ) Seasonal Chart Caterpillar, Inc. (CAT) Seasonal Chart Celestica, Inc. (CLS) Seasonal Chart Cerner Corporation (CERN) Seasonal Chart Citrix Systems, Inc. (CTXS) Seasonal Chart Core Laboratories N.V. (CLB) Seasonal Chart CoreLogic, Inc. (CLGX) Seasonal Chart Deutsche Bank AG (DB) Seasonal Chart F5 Networks, Inc. (FFIV) Seasonal Chart Facebook, Inc. (FB) Seasonal Chart FLIR Systems, Inc. (FLIR) Seasonal Chart Ford Motor Company (F) Seasonal Chart Freeport-McMoran, Inc. (FCX) Seasonal Chart General Dynamics Corporation (GD) Seasonal Chart GlaxoSmithKline PLC (GSK) Seasonal Chart Helmerich & Payne, Inc. (HP) Seasonal Chart Hilton Worldwide Holdings Inc. (HLT) Seasonal Chart Las Vegas Sands Corp. (LVS) Seasonal Chart Nasdaq, Inc. (NDAQ) Seasonal Chart NETGEAR, Inc. (NTGR) Seasonal Chart NextEra Energy, Inc. (NEE) Seasonal Chart Norfolk Souther Corporation (NSC) Seasonal Chart Northern Trust Corporation (NTRS) Seasonal Chart Northrop Grumman Corporation (NOC) Seasonal Chart O'Reilly Automotive, Inc. (ORLY) Seasonal Chart Owens Corning Inc (OC) Seasonal Chart Packaging Corporation of America (PKG) Seasonal Chart Raymond James Financial, Inc. (RJF) Seasonal Chart Rollins, Inc. (ROL) Seasonal Chart Six Flags Entertainment Corporation New (SIX) Seasonal Chart Spirit Airlines, Inc. (SAVE) Seasonal Chart Suncor Energy Inc. (SU) Seasonal Chart Tesla, Inc. (TSLA) Seasonal Chart Thermo Fisher Scientific Inc (TMO) Seasonal Chart Torchmark Corporation (TMK) Seasonal Chart Trinity Industries, Inc. (TRN) Seasonal Chart Tupperware Brands Corporation (TUP) Seasonal Chart United Parcel Service, Inc. (UPS) Seasonal Chart Universal Forest Products, Inc. (UFPI) Seasonal Chart V.F. Corporation (VFC) Seasonal Chart Varian Medical Systems, Inc. (VAR) Seasonal Chart Xilinx, Inc. (XLNX) Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.