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Stock Market Outlook for June 5, 2020


S&P 500 Index charts a doji (indecision) candlestick at the March high as the largest sectors in the market start to fall out of favour.

 

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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Verizon Communications (NYSE:VZ) Seasonal Chart

Verizon Communications (NYSE:VZ) Seasonal Chart

First Financial Bankshares, Inc. (NASD:FFIN) Seasonal Chart

First Financial Bankshares, Inc. (NASD:FFIN) Seasonal Chart

First of Long Island Corp. (NASD:FLIC) Seasonal Chart

First of Long Island Corp. (NASD:FLIC) Seasonal Chart

Southern Co. (NYSE:SO) Seasonal Chart

Southern Co. (NYSE:SO) Seasonal Chart

Caseys General Stores, Inc. (NASD:CASY) Seasonal Chart

Caseys General Stores, Inc. (NASD:CASY) Seasonal Chart

Investors Real Estate Trust (NYSE:IRET) Seasonal Chart

Investors Real Estate Trust (NYSE:IRET) Seasonal Chart

Vanguard Extended Duration Treasury ETF (NYSE:EDV) Seasonal Chart

Vanguard Extended Duration Treasury ETF (NYSE:EDV) Seasonal Chart

 

 

The Markets

Stocks dipped on Thursday as market heavyweights in the technology and health care sectors start to rollover.  The S&P 500 Index shed 0.34%, charting a doji (indecision) candlestick within the span of the previous session’s range.  At the lows of the session, the benchmark tested the gap that was opened on Wednesday between 3085 and 3100, highlighting this zone as a range of short-term support.  The Relative Strength Index is flirting with levels around overbought territory, reaching a high of 68.95 on Wednesday.  Levels above 70 are indicative of a significantly overbought condition.  Stochastics, which tend to be more whippy, are firmly embedded in overbought territory. The big level of resistance overhead can be seen between 3250 and 3300, while levels of support are now many, including major moving averages and open gaps around 2900, 2950, and 3100.

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The next catalyst for stocks is upon us with the monthly nonfarm payroll report for May set to be released before Friday’s opening bell.  Analysts are expecting that 7.725 million payrolls were lost last month, adding to the decline of 20.5 million recorded in the month prior.  Historically, May would be the second strongest month for job growth with payrolls rising by an average of 0.6% for this pre-summer period.  There has not been a May over the past two decades when payrolls have fallen, therefore, Friday’s report will undoubtedly be precedent setting.  We’ll break it all down for subscribers in our intraday report on Friday.  Subscribe now.

On the economic front, Statscan released international trade figures for April.  The headline print indicated that the trade deficit in Canada expanded to $3.3 Billion, from $1.4 Billion previous, the result of a 29.7% decline in exports and a 25.1% decline in imports.  Stripping out the seasonal adjustments, which are irrelevant in this environment, exports actually fell by 32.5% in April, while imports fell by 26.7%.  The average change for each at this time of year is -5.4% and -4.0%, respectively.  Both imports and exports remain significantly disconnected from seasonal norms.  We’ve uploaded the 164 seasonal charts associated with this report to the database at https://charts.equityclock.com/canadian-international-merchandise-trade-exports-importsSubscribe now to access.

Total Canadian Exports of all merchandise Seasonal Chart

Total Canadian Imports of all merchandise Seasonal Chart

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.74.  Wednesday’s put call ratio was the lowest since the middle of January, suggesting complacency.

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Seasonal charts of companies reporting earnings today:

Tribune Publishing Company Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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