Stock Market Outlook for August 1, 2019
S&P 500 Index has averaged a gain of a mere 0.1% in August with 58% of periods showing gains over the past 50 years.
*** 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.
Energy Recovery Inc. (NASD:ERII) Seasonal Chart
Sysco Corp. (NYSE:SYY) Seasonal Chart
National Grid Group (NYSE:NGG) Seasonal Chart
Polo Ralph Lauren Corp. (NYSE:RL) Seasonal Chart
ATN International, Inc. (NASD:ATNI) Seasonal Chart
The Markets
Stocks sold off on Wednesday as investors reacted comments from Fed Chair Jerome Powell following the announcement of a 25 basis point cut in the overnight rate. The S&P 500 Index shed 1.09%, giving up the psychologically important 3000 level. The benchmark closed below its 20-day moving average, on track to test the 50-day, a level we have been citing in recent days as the downside risk. Previous resistance at 2950 may also be a level that investors defend given the consolidation above this previous hurdle during the past month. Momentum indicators on the daily look continue to roll over, following through with the MACD sell signal on the large-cap index that was generated mid-month.
Wednesday marked the last day of July and for the month the S&P 500 Index was higher by 1.31%, well ahead of the 0.5% increase that is average for the seventh month of the year. For the month ahead a gain of a mere 0.1% is the norm with 58% of periods over the past 50 years showing positive results. The remainder of the third quarter is notorious for increasing volatility, something I highlighted in my Market Outlook section of Wednesday evening’s episode of Market Call. You can view the segment by navigating to the following link: https://www.bnnbloomberg.ca/video/jon-vialoux-s-market-outlook~1742714
On the economic front, Statscan released GDP figures for the month of May. The headline print indicated that GDP in Canada increased by 0.2% in May, which was stronger than the 0.1% increase that was forecasted by analysts. The result places the year-over-year change at +1.4%, down from the +1.5% reported previously. Stripping out the seasonal adjustments, GDP in Canada actually increased by 1.6% in May, which is stronger than the 1.0% increase that is average for this time of year. The result places the year-to-date change inline with the seasonal average trend through the end of May, up by 2.4%. This is the second best pace through this timeframe in the past decade, lagging only the 3.2% increase that was realized through May of 2017. We sent out further information to subscribers intraday on Wednesday. Don’t miss our next report, subscribe now.
Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 0.99.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
| Sponsored By... |
|
