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Stock Market Outlook for July 30, 2019


Stocks pull back slightly as investors position ahead of Wednesday’s FOMC announcement.

 

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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Simulations Plus, Inc. (NASD:SLP) Seasonal Chart

Simulations Plus, Inc. (NASD:SLP) Seasonal Chart

Toro Co. (NYSE:TTC) Seasonal Chart

Toro Co. (NYSE:TTC) Seasonal Chart

Synopsys, Inc. (NASD:SNPS) Seasonal Chart

Synopsys, Inc. (NASD:SNPS) Seasonal Chart

Willdan Group Inc. (NASD:WLDN) Seasonal Chart

Willdan Group Inc. (NASD:WLDN) Seasonal Chart

Xylem Inc. (NYSE:XYL) Seasonal Chart

Xylem Inc. (NYSE:XYL) Seasonal Chart

Xcel Energy (NASD:XEL) Seasonal Chart

Xcel Energy (NASD:XEL) Seasonal Chart

Symantec Corp. (NASD:SYMC) Seasonal Chart

Symantec Corp. (NASD:SYMC) Seasonal Chart

 

Upcoming BNN Appearance:

I will be on BNN’s Market Call Tonight at 6:00pm ET on Wednesday, July 31st taking your calls on Technical Analysis and Seasonal Investing.  CALL TOLL-FREE 1-855-326-6266,  EMAIL marketcall@bnnbloomberg.ca,  or TWEET @MarketCall.

 

The Markets

Stocks closed mixed on Monday as market participants positioned ahead of the end of the month.  Investors were also adjusting allocations ahead of Wednesday’s FOMC announcement, which the market widely expects will deliver the first rate-cut in years.  The S&P 500 Index traded lower by just less than two-tenths of one percent, buoyed by strength in defensive sectors, such as utilities, staples, and health care.  The benchmark remains supported by the 20-day moving average, which continues to point higher.  There is a high likelihood that the benchmark clings to major moving averages, whether it be the 20 or 50-day, going into Wednesday’s event as investors seek a level they are comfortable with given the uncertainty and market-moving implications from the event itself.  Momentum indicators have been negatively diverging from price over the past couple of weeks, suggesting a lack of buying demand into these all-time high levels in the broader market.  There is an elevated risk of a market decline from current levels  and this is probably not the time to be aggressive in equity allocations.

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We continue to be drawn by the activity of the MSCI World ex-US Index given that the next leg of the equity rally will be dependent on those areas that have lagged.  Following years of tremendous inflows to US stocks, pushing valuations into premium territory amidst the relatively better growth prospects of the US economy versus the rest of the world, global stocks have inevitably lagged by comparison.  Analysts have been trying to justify the better risk-reward in stocks outside of the US for years, yet the US market, as gauged by the S&P 500 Index, continues to outperform.  Any signs of strength in global equities could fuel a shift from US stocks to global equities, the net effect of which would likely see gains in both (global stocks relatively more).  The MSCI World ex-US Index is grinding below previous support, now resistance, just below 1950, a break of which could be a likely trigger of a shift towards these laggards.  The global benchmark broke above declining trendline resistance in April and tested that previous declining trendline as support back in May.  Seasonally, while still room to run in the period of seasonal weakness, it is best to add global equities to your radar given that the period of seasonal weakness for the group, overall, ends in September.

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$MSWORLD

Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.81.

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Seasonal charts of companies reporting earnings today:

A.O Smith Corporation (AOS) Seasonal Chart Acadia Healthcare Company, Inc. (ACHC) Seasonal Chart Akamai Technologies, Inc. (AKAM) Seasonal Chart Allstate Corporation (The) (ALL) Seasonal Chart Altria Group (MO) Seasonal Chart Amgen Inc. (AMGN) Seasonal Chart Apple Inc. (AAPL) Seasonal Chart Boston Properties, Inc. (BXP) Seasonal Chart C.H. Robinson Worldwide, Inc. (CHRW) Seasonal Chart Celgene Corporation (CELG) Seasonal Chart ConocoPhillips (COP) Seasonal Chart Cummins Inc. (CMI) Seasonal Chart D.R. Horton, Inc. (DHI) Seasonal Chart Eaton Corporation, PLC (ETN) Seasonal Chart Electronic Arts Inc. (EA) Seasonal Chart Eli Lilly and Company (LLY) Seasonal Chart Equity Residential (EQR) Seasonal Chart Extra Space Storage Inc (EXR) Seasonal Chart Gartner, Inc. (IT) Seasonal Chart Gilead Sciences, Inc. (GILD) Seasonal Chart Imax Corporation (IMAX) Seasonal Chart Mastercard Incorporated (MA) Seasonal Chart Merck & Company, Inc. (MRK) Seasonal Chart Mondelez International, Inc. (MDLZ) Seasonal Chart NuVasive, Inc. (NUVA) Seasonal Chart ONEOK, Inc. (OKE) Seasonal Chart Pfizer, Inc. (PFE) Seasonal Chart Procter & Gamble Company (The) (PG) Seasonal Chart Public Storage (PSA) Seasonal Chart R.R. Donnelley & Sons Company (RRD) Seasonal Chart Ralph Lauren Corporation (RL) Seasonal Chart Sony Corp Ord (SNE) Seasonal Chart Under Armour, Inc. (UAA) Seasonal Chart Waters Corporation (WAT) Seasonal Chart Xerox Corporation (XRX) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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