Equity Clock

Stock Market Outlook for July 6, 2020

Non-farm payrolls actually increased by 5.103 million, or 3.8%, in June, which is the largest percentage increase on record.

 

 

 

*** 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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Colfax Corp. (NYSE:CFX) Seasonal Chart

Iteris Holdings Class A (NASD:ITI) Seasonal Chart

Google Inc. (NASDAQ:GOOG) Seasonal Chart

Gamestop Corp. (NYSE:GME) Seasonal Chart

Vanguard Mega Cap ETF (NYSE:MGC) Seasonal Chart

Armour Residential REIT Inc. (NYSE:ARR) Seasonal Chart

Bank Of America Corp. (NYSE:BAC) Seasonal Chart

 

Note: No report on Friday due to the Independence Day holiday in the US.

 

The Markets

Stocks closed higher on Thursday as investors reacted to a much better than expected payroll report for June.  The Bureau of Labor Statistics indicates that 4.8 million payrolls were added last month, which is the largest one month increase for payrolls on record. Analysts had expected an increase of 3.0 million. The unemployment rate ticked lower from 13.3% to 11.1%, which still represents the highest jobless rate since the Depression era. Average hourly earnings, meanwhile, dipped by 1.2%, which is a larger drop than the 0.8% decline expected. Stripping out the seasonal adjustments, payrolls actually increased by 5.103 million, or 3.8%, in June, which is the largest percentage increase on record. The average change for this time of year is a mere 0.3%. The year-to-date change is now down by 9.4%, still far below the 0.6% increase that is average through the first six months of the year. This remains the sharpest drop through the first half of the year on record.  We sent out further insight to subscribers intraday.  Subscribe now.

The S&P 500 Index closed higher by just less than half of one percent, continuing to hold support at the 50-day moving average.  The benchmark tested levels within the open gap below 3200 intraday, but traders used the opportunity to sell into the strength, cutting exposure ahead of the 3-day long weekend amidst rising case counts of coronavirus.  Momentum indicators continue to show signs of curling higher around their middle lines, characteristic of a bull market trend.  MACD is converging on its signal line, hinting that a buy signal may be imminent.  The benchmark closed at 3130, which has been a point of resistance in recent weeks.

Just Released…

Our monthly outlook for July tells you everything you need to know for the month(s) ahead.

Highlights in this report include:

• Equity market tendencies in the month of July
• Resiliency of the market in the midst of tremendous uncertainty
• The influence of the retail investor
• The recovery of economic data
• The disparity between the rebound in consumer and business data
• The hedge against summer volatility
• Opportunities outside of the US
• 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 July

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

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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