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Stock Market Outlook for April 24, 2020


Headlines pertaining to Gilead’s coronavirus treatment, Remdesivir, cause investors to reverse course on Thursday, leaving broad market gauges stalled around their declining 50-day moving averages.

 

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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IAMGold Corp. (TSE:IMG.TO) Seasonal Chart

IAMGold Corp. (TSE:IMG.TO) Seasonal Chart

Vertex Pharmaceuticals Inc. (NASD:VRTX) Seasonal Chart

Vertex Pharmaceuticals Inc. (NASD:VRTX) Seasonal Chart

Luminex Corp. (NASD:LMNX) Seasonal Chart

Luminex Corp. (NASD:LMNX) Seasonal Chart

FLY Leasing Ltd. (NYSE:FLY) Seasonal Chart

FLY Leasing Ltd. (NYSE:FLY) Seasonal Chart

Cornerstone OnDemand, Inc. (NASD:CSOD) Seasonal Chart

Cornerstone OnDemand, Inc. (NASD:CSOD) Seasonal Chart

Alimentation Couche-Tard, Inc. (TSE:ATD/A.TO) Seasonal Chart

Alimentation Couche-Tard, Inc. (TSE:ATD/A.TO) Seasonal Chart

Carbonite, Inc. (NASD:CARB) Seasonal Chart

Carbonite, Inc. (NASD:CARB) Seasonal Chart

Agnico-Eagle Mines Ltd. (TSE:AEM.TO) Seasonal Chart

Agnico-Eagle Mines Ltd. (TSE:AEM.TO) Seasonal Chart

Shaw Communications, Inc. (NYSE:SJR) Seasonal Chart

Shaw Communications, Inc. (NYSE:SJR) Seasonal Chart

Cerner Corp. (NASD:CERN) Seasonal Chart

Cerner Corp. (NASD:CERN) Seasonal Chart

Tennant Co. (NYSE:TNC) Seasonal Chart

Tennant Co. (NYSE:TNC) Seasonal Chart

Westport Fuel Systems Inc. (NASD:WPRT) Seasonal Chart

Westport Fuel Systems Inc. (NASD:WPRT) Seasonal Chart

Rogers Communications, Inc. (NYSE:RCI) Seasonal Chart

Rogers Communications, Inc. (NYSE:RCI) Seasonal Chart

BlackRock MuniHoldings Investment Quality Fund (NYSE:MFL) Seasonal Chart

BlackRock MuniHoldings Investment Quality Fund (NYSE:MFL) Seasonal Chart

iShares MSCI USA Momentum Factor ETF (AMEX:MTUM) Seasonal Chart

iShares MSCI USA Momentum Factor ETF (AMEX:MTUM) Seasonal Chart

SPDR S&P Health Care Equipment ETF (NYSE:XHE) Seasonal Chart

SPDR S&P Health Care Equipment ETF (NYSE:XHE) Seasonal Chart

 

 

The Markets

Stocks closed flat on Thursday, giving back earlier gains, as traders reacted to a headline that suggested Gilead’s anticipated treatment for coronavirus, Remdesivir, may not be as effective as initially hoped.  Shares of the biotech titan dipped by 4.34%, testing support around rising 20 and 50-day moving averages at the lows of the session.  Trendline support beneath the stock remains firmly intact, however, fading relative performance compared to the broad market suggests buying demand has waned in recent days.  Seasonally, the optimal holding period for the stock is ahead, running from May 31st to October 27th, following a similar path as the broader biotechnology industry.

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Gilead Sciences, Inc. (NASD:GILD) Seasonality

The S&P 500 Index closed down by a mere five basis points on Thursday, continuing to react to its declining 50-day moving average.  On one hand, the stalling of the trend around this significant moving average emphasizes where the supply to sell stock currently sits.  On the other hand, the fact that the benchmark has effectively been pinned to this variable hurdle for the past week emphasizes the resiliency of the bulls to not allow the benchmark to drift too far away from the hurdle.  This is a typical hurdle for investors to cling to in times of uncertainty until the next catalyst for stocks comes along.  Momentum indicators continue to roll over, which has triggered a sell signal according to stochastics.    MACD and RSI continue to show characteristics of a bear market trend with each showing struggle around their middle line. Follow along with our approach by subscribing to our service to receive daily and monthly reports on everything relevant to execute a three-pronged approach incorporating seasonal, technical, and fundamental analysis.

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We are busy drafting up our monthly report for May, providing subscribers with everything from what to look for to signal the all clear to load up on risk to the market tendencies for the month(s) ahead.  Subscribe now to receive a copy when it is released.

On the economic front, a report on new home sales in the US was released during Thursday’s session.  The headline print indicated that sales of new homes fell by 15.4% in March to a seasonally adjusted annualized rate of 627,000.  Analysts were expecting a rate of 643,000.  Stripping out the seasonal adjustments, new home sales actually fell by 7.6% last month, which is a significant negative divergence compared to the 15.5% increase that is average for the third month of the year.  The year-to-date change is now trending 13.0% below the seasonal norm, representing the worst first quarter performance since 2011.  As with everything else in the economy, the disconnect from seasonal norms is obvious.  March is typically the peak of the buying season for new homes, but, with the economy shutdown, potential buyers are unable to contribute to this seasonal economic tendency.  Those that are purchasing are attempting to stretch their closing date by going after homes not started or under construction, which are still up on the year by 35.7% and 33.3%, respectively.  Meanwhile, sales of completed new homes are up a mere 15% year-to-date.  There is an obvious desire from those that are buying to close after this coronavirus event fades.  The seasonal charts from this report are available via the following link: https://charts.equityclock.com/u-s-new-home-sales

New Home Sales Seasonal Chart

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.87.

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Seasonal charts of companies reporting earnings today:

Verizon Communications Inc. Seasonal Chart Sanofi Seasonal Chart American Express Company Seasonal Chart Freeport-McMoran, Inc. Seasonal Chart Gentex Corporation Seasonal Chart Autoliv, Inc. Seasonal Chart Portland General Electric Company Seasonal Chart Synovus Financial Corp. Seasonal Chart Triton International Limited Seasonal Chart Barnes Group, Inc. Seasonal Chart Civista Bancshares, Inc. Seasonal Chart Community Bankers Trust Corporation. Seasonal Chart Strattec Security Corporation Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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