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Stock Market Outlook for June 2, 2020


US Construction Spending increased by 2.5% (NSA) in April, led by spending on public safety projects given the pandemic response.

 

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.

Baxter Intl Inc. (NYSE:BAX) Seasonal Chart

Baxter Intl Inc. (NYSE:BAX) Seasonal Chart

LeMaitre Vascular Inc. (NASD:LMAT) Seasonal Chart

LeMaitre Vascular Inc. (NASD:LMAT) Seasonal Chart

Patrick Industries, Inc. (NASD:PATK) Seasonal Chart

Patrick Industries, Inc. (NASD:PATK) Seasonal Chart

Towne Bank (NASD:TOWN) Seasonal Chart

Towne Bank (NASD:TOWN) Seasonal Chart

Tennessee Valley Authorit (NYSE:TVE) Seasonal Chart

Tennessee Valley Authorit (NYSE:TVE) Seasonal Chart

RH (NYSE:RH) Seasonal Chart

RH (NYSE:RH) Seasonal Chart

Invesco S&P 500 Top 50 ETF (NYSE:XLG) Seasonal Chart

Invesco S&P 500 Top 50 ETF (NYSE:XLG) Seasonal Chart

 

 

The Markets

Stocks closed higher to start the first trading session of June, shaking off overnight worries pertaining to the unrest in major cities across the US.  The S&P 500 Index added just less than four-tenths of one percent, maintaining ground above the widely scrutinized 200-day moving average.  Major moving averages are all in a position of support, including the 20-day at 2930 and the 50-day at 2785.  Momentum indicators are pointing higher with stochastics now firmly embedded in overbought territory.  The rally continues to broaden out with those areas that were impacted the most by the market decline now seeing performance that tops the leaderboard day after day.  These include energy, financials, industrials, materials, and consumer discretionary, all core cyclical sectors that have outperformed the market over the past few weeks.  Increasing evidence that the worst is behind us as the economy reopens is driving the performance, leading to a massive catch-up  trade.

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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.

On the economic front, a report on construction spending in the US was released during Monday’s session.  The headline print indicated that spending on construction projects fell by 2.9% in April, which is significantly better than the 5.5% decline that was forecasted by analysts.  The year-over-year change now sits at +3.0%, down from the +6.7% reported previous.  Stripping out the seasonal adjustments, construction spending in the US actually increased by 2.5% in April, which is weaker than the 7.2% increase that is average during this prime month in the construction season.  The year-to-date change is now higher on the year by 7.6%, which is only slightly below the seasonal norm that calls for a rise of 8.1% through the first four months of the year.  Perhaps to be expected, spending on public safety projects is trending well above average given the pandemic response.  Meanwhile spending on manufacturing, lodging, office, and religious projects are trending well below seasonal norms.  As for the category that is most commonly associated with spring and summer construction season, spending on highway and street projects is trending 26.8% above the seasonal average trend, showing no negative impact from the pandemic event.  Subscribers can login to view all of the seasonal charts from this report at https://charts.equityclock.com/u-s-construction-spending

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

Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.83.

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Seasonal charts of companies reporting earnings today:

Donaldson Company, Inc. Seasonal Chart HealthEquity, Inc. Seasonal Chart Dick's Sporting Goods Inc Seasonal Chart Cracker Barrel Old Country Store, Inc. Seasonal Chart Ambarella, Inc. Seasonal Chart Baozun Inc. Seasonal Chart Digital Turbine, Inc. Seasonal Chart Everi Holdings Inc. Seasonal Chart Build-A-Bear Workshop, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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