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Stock Market Outlook for May 1, 2020


S&P 500 Index has averaged an unchanged result in May, however, the frequency of positive results stacks up at 65% over the past 20 years.

 

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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Equity Residential Property Trust (NYSE:EQR) Seasonal Chart

Equity Residential Property Trust (NYSE:EQR) Seasonal Chart

Newmont Mining Corp. (NYSE:NEM) Seasonal Chart

Newmont Mining Corp. (NYSE:NEM) Seasonal Chart

Kinross Gold Corp. (TSE:K.TO) Seasonal Chart

Kinross Gold Corp. (TSE:K.TO) Seasonal Chart

Commerce Bancshares, Inc. (NASD:CBSH) Seasonal Chart

Commerce Bancshares, Inc. (NASD:CBSH) Seasonal Chart

Omega Healthcare Invs, Inc. (NYSE:OHI) Seasonal Chart

Omega Healthcare Invs, Inc. (NYSE:OHI) Seasonal Chart

Steris Corp. (NYSE:STE) Seasonal Chart

Steris Corp. (NYSE:STE) Seasonal Chart

Agree Realty Corp. (NYSE:ADC) Seasonal Chart

Agree Realty Corp. (NYSE:ADC) Seasonal Chart

Core Mark Holding Co., Inc. (NASD:CORE) Seasonal Chart

Core Mark Holding Co., Inc. (NASD:CORE) Seasonal Chart

Merit Medical Systems, Inc. (NASD:MMSI) Seasonal Chart

Merit Medical Systems, Inc. (NASD:MMSI) Seasonal Chart

Omnicell Inc. (NASD:OMCL) Seasonal Chart

Omnicell Inc. (NASD:OMCL) Seasonal Chart

Chegg, Inc. (NYSE:CHGG) Seasonal Chart

Chegg, Inc. (NYSE:CHGG) Seasonal Chart

 

 

The Markets

Stocks traded lower on Thursday as investment managers executed their final portfolio allocations before the close of the month.  The S&P 500 Index slipped by 0.92%, finding support at the lower limit of yesterday’s open gap between 2890 and 2920.  The technology and consumer discretionary sectors managed to outperform on the day as investors awaited earnings from Apple and Amazon after the closing bell.  Thus far, earnings season has been a welcome distraction to investors that had been fearful of the ongoing spread of the coronavirus.  Many companies have withdrawn guidance, leaving traders to speculate on how these companies will fare through the subsequent quarters of the year.  The earnings season distraction typically persists into the start of May, once the market titans have reported, which suggests that analysts are likely to re-focus on the coronavirus threat soon, whether good or bad.

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For the month, the large-cap benchmark was higher by 12.68%, closing marginally higher than its rising 20-month moving average at 2891.  At the high of April, within the past two sessions, the benchmark had virtually eliminated all of March’s decline, trading back to the vicinity of the February 28th close of 2954.  Obviously, the resiliency of this market has caught everyone off guard, particularly in the face of massive adversity as the economy remained crippled amidst the coronavirus overhang.  The result is a testament to the strength that is common through March and April, typically the second strongest consecutive two month span of the year; only the November/December period has seen average returns top this spring strength.  So while the slightly negative performance of the market over the past two months hardly seems like a win, in the midst of economic data that is akin to a depression, it certainly seems like an impressive result.  Looking for more technical analysis?  In today’s market outlook to subscribers, we provide a very timely look at the MACD indicator and the signals it has and is providing pertaining to buying and selling stocks.  Subscribe now and we’ll send it to you.

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For the month ahead, the S&P 500 Index has averaged an unchanged (0.0%) result in May with positive results realized in 65% of periods over the past 20 years.  Of course, the month has been attributed to the often touted strategy of “Sell In May and Go Away,” which suggests selling equity positions in this mid-spring month in an attempt to buy them back in the fall at lower prices.  We break it all down in our just released monthly report to subscribers, which may cause you to change your perception towards this often talked about portfolio approach.  Subscribe now and we’ll send this monthly report to you.

S&P 500 Index Seasonal Chart

Just Released…

Our monthly report for May covers everything you need to execute your trading plan through the month(s) ahead.

Highlights include:

  • Equity market tendencies in the month of May
  • The shift of investor sentiment over recent months
  • Putting our playbook in context of the 2008 to 2009 market decline
  • Signs to lookout for in order to regain confidence in the market
  • Don’t fight the Fed and what the expanding balance sheet implies for Gold
  • Review of the market fundamentals and gauging the toll of COVID-19
  • When to anticipate a second coronavirus wave
  • What’s next in the seasonal rotation
  • The technical status of the S&P 500 Index
  • Sector reviews and ratings
  • Notable stocks and ETFs entering their period of strength in May

Subscribe now and we’ll send this 81-page report to you.

On the economic front, a report on Canadian GDP was released before Thursday’s opening bell.  The headline print of February’s report indicated that economic activity in Canada was unchanged (0.0%) versus the month prior, a miss versus analyst estimates that called for an increase of 0.1%.  The year-over-year increase now sits at 2.1%, up from the 1.8% year-over-year increase reported in the month prior.  Stripping out the seasonal adjustments, GDP in Canada actually increased by 3.1% in February, which is firmly weaker than the 4.5% increase that is average for the month.  The result places the year-to-date change lower by six-tenths of one percent, which is a negative divergence compared to the increase through this point of the year of eight-tenths of one percent.  While we know that the GDP figures for March and April are going to look dreadful, there are indications that strains were apparent in economic activity in this country even prior to the coronavirus shutdown.  Industrial production, while showing a trend that was better than last year, was recording performance that was firmly below average.  Metal production showed a particularly weak trend as the closure of the Chinese economy early in the year and the hangover from the tariff war from the past few years weighed on activity.  One of the few bright spots in the report, as would be expected, was medical equipment and supplies manufacturing, which was up 25% through the first two months of the year.  Subscribers can login to the chart database to view all of the seasonal charts for this report at the following link: https://charts.equityclock.com/canada-monthly-gross-domestic-product-gdp-by-industry

Canada GDP - All industries Seasonal Chart

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.96.

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Seasonal charts of companies reporting earnings today:

Berkshire Hathaway Inc. Seasonal Chart Exxon Mobil Corporation Seasonal Chart Chevron Corporation Seasonal Chart AbbVie Inc. Seasonal Chart Charter Communications, Inc. Seasonal Chart Honeywell International Inc. Seasonal Chart Estee Lauder Companies, Inc. (The) Seasonal Chart Colgate-Palmolive Company Seasonal Chart TC Energy Corporation Seasonal Chart Aon plc Seasonal Chart Phillips 66 Seasonal Chart Johnson Controls International plc Seasonal Chart Clorox Company (The) Seasonal Chart LyondellBasell Industries NV Seasonal Chart Weyerhaeuser Company Seasonal Chart Restaurant Brands International Inc. Seasonal Chart Imperial Oil Limited Seasonal Chart W. P. Carey Inc. Seasonal Chart Cboe Global Markets, Inc. Seasonal Chart Phillips 66 Partners LP Seasonal Chart Apollo Global Management, Inc Seasonal Chart Magellan Midstream Partners L.P. Seasonal Chart Hill-Rom Holdings Inc Seasonal Chart Newell Brands Inc. Seasonal Chart Berry Global Group, Inc. Seasonal Chart ITT Inc. Seasonal Chart Cameco Corporation Seasonal Chart Huntsman Corporation Seasonal Chart Balchem Corporation Seasonal Chart Timken Company (The) Seasonal Chart WillScot Corporation Seasonal Chart Office Properties Income Trust Seasonal Chart Mobile Mini, Inc. Seasonal Chart MSG Networks Inc. Seasonal Chart ImmunoGen, Inc. Seasonal Chart Virtus Investment Partners, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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