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Stock Market Outlook for June 1, 2020


The S&P 500 Index has lost an average of 0.6% in June with 55% of periods showing gains 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.

Johnson & Johnson (NYSE:JNJ) Seasonal Chart

Johnson & Johnson (NYSE:JNJ) Seasonal Chart

Gilead Sciences, Inc. (NASD:GILD) Seasonal Chart

Gilead Sciences, Inc. (NASD:GILD) Seasonal Chart

Masimo Corp. (NASD:MASI) Seasonal Chart

Masimo Corp. (NASD:MASI) Seasonal Chart

ABC Bancorp (NASD:ABCB) Seasonal Chart

ABC Bancorp (NASD:ABCB) Seasonal Chart

Coca-Cola Bottling Co. Consolidated (NASD:COKE) Seasonal Chart

Coca-Cola Bottling Co. Consolidated (NASD:COKE) Seasonal Chart

Canadian Imperial Bk Comm (NYSE:CM) Seasonal Chart

Canadian Imperial Bk Comm (NYSE:CM) Seasonal Chart

 

 

The Markets

Stocks ended higher to close the final trading session of the week and the month.  The S&P 500 Index gained just less than half of one percent, shaking off intraday jitters pertaining to what President Trump might have to say relating to China.  The benchmark tested its recently broken 200-day moving average at the low of the day, raising confidence that this long-term moving average is positioned to act as support.  The close above this widely scrutinized average on the final session of the week and the month increases the legitimacy of the breakout and will present a powerful signal to technical traders to become less cautious of equities amidst this backdrop of support at the long-term hurdle.  Short-term momentum indicators have adopted more of a bullish tilt in the past week, suggesting that buying demand has re-emerged following the approximately month-long horizontal trading range between mid-April and mid-May.

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For the month of May, the S&P 500 Index was higher by 4.53%, which is the best May return since the end of the Great Recession in 2009.  Over the past 20 years, the month of May has averaged an unchanged result.  The benchmark has moved above its 20-month moving average, which capped the advance in April.  Negative momentum divergences with respect to MACD and RSI continue to raise questions pertaining to the strength of the long-term trend.  We provide further insight pertaining to the technical status of the large cap benchmark in our monthly report for June.  Subscribe now.

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Just Released…

Our monthly outlook for June breaks down everything you need to know for the month(s) ahead.

Highlights in this report include:

  • Equity market tendencies in the month of June
  • The evolution of investor sentiment throughout the past few months
  • A review of the indications provided previous to regain confidence in the market
  • What analyst expectations have to tell us
  • The alleviation of strains in the credit market
  • A real-time look at the state of employment
  • The impact of home prices on consumer confidence
  • The Fed’s fight to maintain market stability
  • 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 June

Subscribe now to receive this 69-page report.

Looking ahead, June has been one of the weaker months of the year over the past two decades.  The S&P 500 Index has lost an average of 0.6% in this last month of the first half of the year, however, positive results have still been realized in 55% of periods over the past 20 years.  You can read more in our monthly outlook for June that has just been released to subscribers.

S&P 500 Index Seasonal Chart

$SPX Monthly Averages

On the economic front, the advanced read of US international trade was released before Friday’s session.  The headline print indicated that the US trade deficit expanded significantly to $69.7 billion from $65.0 billion previous, the result of a 25.2% decline in exports and a 14.3% decline in imports.  Analysts were expecting a deficit of $64.7 billion.  Stripping out the seasonal adjustments, exports actually fell by 29.0% in April, while imports fell by 15.6%.  The average change for this time of year is a decline of 6.9% and 2.0%, respectively.  On the export side, everything has become disconnected from seasonal norms with the exception of foods, feeds, and beverages, which is seeing activity that is 1.0% above the seasonal average trend.  Subscribers can login to the chart database to view the remaining charts to this report at https://charts.equityclock.com/u-s-international-trade-data.

US International Trade - Exports Seasonal Chart

US International Trade - Imports Seasonal Chart

North of the border, Statscan released its Gross Domestic Product report for the month of March. The report indicates that GDP in Canada fell by 7.2% in March, which is actually better than the consensus analyst estimate that called for a decline of 9.0%. The year-over-year increase now sits at -5.8%, down from the 2.1% increase reported in the month prior. Stripping out the seasonal adjustments, the change in GDP in Canada was the same as the headline print, down 7.2%, which is much weaker that the 0.3% decline that is average for the third month of the year. The year-to-date change is now down by 7.8% through the end of the first quarter, which is 8.3% below the seasonal average trend. This is the largest gap that has been recorded versus the seasonal average on record.  We sent out further insight to subscribers intraday.  Signup now to see what areas of the economy are supportive of seasonal trades in the equity market.

http://charts.equityclock.com/seasonal_charts/economic_data/v65201756_seasonal_chart.PNG

Sentiment on Friday, as gauged by the put-call ratio, ended slightly bullish at 0.92.

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Seasonal charts of companies reporting earnings today:

Autohome Inc. Seasonal Chart Enersys Seasonal Chart Embraer S.A. Seasonal Chart NGL ENERGY PARTNERS LP Seasonal Chart Thermon Group Holdings, Inc. Seasonal Chart Capital Southwest Corporation Seasonal Chart Protalix BioTherapeutics, Inc. Seasonal Chart Perceptron, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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