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Stock Market Outlook for July, 31, 2019


Yield on the 10-year treasury note holding around the psychologically important 2% level ahead of the 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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Signet Jewelers Ltd. (NYSE:SIG) Seasonal Chart

Signet Jewelers Ltd. (NYSE:SIG) Seasonal Chart

Broadridge Financial Solutions, LLC (NYSE:BR) Seasonal Chart

Broadridge Financial Solutions, LLC (NYSE:BR) Seasonal Chart

 

Upcoming BNN Appearance:

I will be on BNN’s Market Call Tonight at 6:00pm ET this evening (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 dipped for a second day as investors continue to adjust allocations ahead of the Fed announcement on Wednesday.  The S&P 500 index shed just less than three-tenths of a percent, testing the rising 20-day moving average at the lows of the session.  Downside risks toward the 50-day moving average remain intact, particularly if the FOMC announcement fails to deliver what the market desires.  The consensus is for a rate cut of 25 basis points with a smaller contingent expecting a cut of as much as 50 basis points.  The message that the fed portrays pertaining to the health/vulnerability of the economy and their willingness/ability to be accommodative moving forward are perhaps the more important variables that investors will weigh following he result.

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The yield on the 10-year treasury note has attempted to bottom around 2% ahead of the announcement, seemingly waiting for direction from the Fed itself.  The intermediate-term trend remains that of lower-lows and lower-highs and momentum indicators on the daily chart are trending in bearish territory, which would imply bullish potential for the price of the fixed income asset.  Seasonally, treasury prices tend to rise through the third quarter.

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10 Year U.S. Treasury Notes Futures (TY) Seasonality

On the economic front, a report on home prices in the US indicated that the growth in prices is starting to wane.  The headline print indicated that the 20-city index increased by 0.1% in May, slightly weaker than the consensus analyst estimate that called for a 0.2% increase.  The year-over-year rate now sits at 2.4%, down from the 2.5% reported in the previous month.  Stripping out the seasonal adjustments, prices of homes actually increased by 0.6% in May, which is almost half of the 1.1% increase that is average for this time of year.  The result places home prices higher by 2.0% through the first five months of the year, which is just a mere tenth of a percent above average through this timeframe.  This is the weakest pace since 2012, suggesting that after many years of above average increases that growth in prices is finally normalizing.  The last time a similar normalization was realized was in 2006, eventually leading to the decline in prices in 2007, 2008, and 2009 as the economic recession took a toll.  Housing has historically been a leading indicator to economic downturns, therefore the results, while not necessarily having immediate implications, should be monitored accordingly. Subscribers can login and view the charts via the following link: https://charts.equityclock.com/sp-corelogic-case-shiller-home-price-index-city-breakdown

S&P/Case-Shiller 20-City Composite Home Price Index Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.03

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Seasonal charts of companies reporting earnings today:

Acco Brands Corporation (ACCO) Seasonal Chart Alamos Gold Inc. (AGI) Seasonal Chart Allison Transmission Holdings, Inc. (ALSN) Seasonal Chart American Tower Corporation (REIT) (AMT) Seasonal Chart American Water Works (AWK) Seasonal Chart Annaly Capital Management Inc (NLY) Seasonal Chart Apache Corporation (APA) Seasonal Chart Automatic Data Processing, Inc. (ADP) Seasonal Chart AvalonBay Communities, Inc. (AVB) Seasonal Chart Baker Hughes, a GE company (BHGE) Seasonal Chart Ballard Power Systems, Inc. (BLDP) Seasonal Chart Bunge Limited (BG) Seasonal Chart CF Industries Holdings, Inc. (CF) Seasonal Chart CGI Inc. (GIB) Seasonal Chart Church & Dwight Company, Inc. (CHD) Seasonal Chart Churchill Downs, Incorporated (CHDN) Seasonal Chart CME Group Inc. (CME) Seasonal Chart Cognizant Technology Solutions Corporation (CTSH) Seasonal Chart Credit Suisse Group (CS) Seasonal Chart Dominion Energy, Inc. (D) Seasonal Chart Encana Corporation (ECA) Seasonal Chart Flowserve Corporation (FLS) Seasonal Chart Freightcar America, Inc. (RAIL) Seasonal Chart General Electric Company (GE) Seasonal Chart HCP, Inc. (HCP) Seasonal Chart Hess Corporation (HES) Seasonal Chart Hillenbrand Inc (HI) Seasonal Chart Hologic, Inc. (HOLX) Seasonal Chart Humana Inc. (HUM) Seasonal Chart Johnson Controls International plc (JCI) Seasonal Chart Kinross Gold Corporation (KGC) Seasonal Chart McKesson Corporation (MCK) Seasonal Chart MetLife, Inc. (MET) Seasonal Chart Mid-America Apartment Communities, Inc. (MAA) Seasonal Chart Molson Coors Brewing Company (TAP) Seasonal Chart Moody's Corporation (MCO) Seasonal Chart Nielsen N.V. (NLSN) Seasonal Chart Occidental Petroleum Corporation (OXY) Seasonal Chart Osisko Gold Royalties Ltd (OR) Seasonal Chart Owens-Illinois, Inc. (OI) Seasonal Chart Peabody Energy Corporation (BTU) Seasonal Chart Pilgrim's Pride Corporation (PPC) Seasonal Chart QUALCOMM Incorporated (QCOM) Seasonal Chart Rogers Corporation (ROG) Seasonal Chart Scotts Miracle-Gro Company (The) (SMG) Seasonal Chart Simon Property Group, Inc. (SPG) Seasonal Chart Southern Company (The) (SO) Seasonal Chart Sun Life Financial Inc. (SLF) Seasonal Chart Tennant Company (TNC) Seasonal Chart The Meet Group, Inc. (MEET) Seasonal Chart United Therapeutics Corporation (UTHR) Seasonal Chart Vertex Pharmaceuticals Incorporated (VRTX) Seasonal Chart Welltower Inc. (WELL) Seasonal Chart Western Digital Corporation (WDC) Seasonal Chart Whiting Petroleum Corporation (WLL) Seasonal Chart Williams Companies, Inc. (The) (WMB) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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