Stock Market Outlook for July 26, 2019
S&P 500 Index deriving a short-term trading range between 2975 and 3020.
*** 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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SKTelecom Co. Ltd. (NYSE:SKM) Seasonal Chart
FutureFuel Corp. (NYSE:FF) Seasonal Chart
BMO S&P-TSX Equal Weight Banks Index ETF (TSE:ZEB.TO) Seasonal Chart
South State Corp. (NASD:SSB) Seasonal Chart
Nielsen NV (NYSE:NLSN) Seasonal Chart
CACI Intl, Inc. (NYSE:CACI) Seasonal Chart
Gran Tierra Energy Inc. (TSE:GTE.TO) Seasonal Chart
Tetra Tech Inc. (NASD:TTEK) Seasonal Chart
Mettler Toledo Intl, Inc. (NYSE:MTD) Seasonal Chart
CDW Corp. (NASD:CDW) Seasonal Chart
Clearwater Paper Corp. (NYSE:CLW) Seasonal Chart
Aqua America, Inc. (NYSE:WTR) Seasonal Chart
Roper Technologies, Inc. (NYSE:ROP) Seasonal Chart
Emera Inc. (TSE:EMA.TO) Seasonal Chart
Parkland Fuel Corp. (TSE:PKI.TO) Seasonal Chart
The Markets
Stocks drifted lower on Thursday as investors priced in the risk of a less dovish Fed when the committee meets next week. The sentiment follows comments from ECB President Mario Draghi, who indicated that there was not a significant risk of an imminent recession in Europe. The S&P 500 Index shed just over half of one percent, giving back the gain from the previous session. Momentum indicators on the daily look continue to roll over, making the index appear top-heavy in the short-term. Downside risks remain to the 50-day moving average, now at 2912.
On the hourly look, a trading range between 2975 and 3020 has developed. A catalyst to fuel a break, one way or the other, may be required. A negative momentum divergence with respect to MACD suggests buying demand has faded around these all-time high levels.
On the economic front, a report on durable goods orders in the US was released before Thursday’s opening bell. The headline print of June’s report indicates that new orders increased by 2.0%, which is far ahead of the 0.5% analyst forecast. Excluding the volatile transportation component, the increase was 1.2%, also much better than the 0.2% consensus estimate. Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually increased by 6.2% in June, which is weaker than the 8.9% increase that is average for this time of year. The result places the year-to-date change higher by a mere 1.1%, which is firmly below the 4.5% increase that is average through the first half of the year. This is the weakest first half of the year performance since 2016, in the midst of the manufacturing recession. Subscribers received our report on the subject, highlighting the drivers and why reason to be cautious may be warranted. Signup now.
Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.77.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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