Stock Market Outlook for April 11, 2022
Another concerning data point out of the transportation industry as Canadian employment in this category plunges in March.
*** 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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Franco-Nevada Corp. (NYSE:FNV) Seasonal Chart
Lithia Motors, Inc. (NYSE:LAD) Seasonal Chart
Cowen, Inc. (NASD:COWN) Seasonal Chart
Yandex N.V. (NASD:YNDX) Seasonal Chart
The Markets
Stocks closed mixed on Friday as ongoing weakness in the bond market (strength in yields) continued to push investors out of growth/technology names. The S&P 500 Index shed just over one quarter of one percent, becoming pinned between the convergence of the 20 and 200-day moving averages, which have been flirted with over the past week heading into the start of earnings season. Wednesday’s downside gap between 4495 and 4515 is showing evidence of defining resistance, which, if confirmed, would be sufficient to start taking down risk again in portfolios as we prepare for the weakness that is speculated of the back half of the second quarter (May and June). Momentum indicators continue to trend higher out of their multi-month slide between November and March, providing some hope that the market can regain the upward trajectory that is typical between the middle of March and the middle of April. As has been highlighted in recent reports, the market will be hesitant to hold any biases heading into earnings season given the unpredictability of what the results may show and, more importantly, how investors may react. This could easily leave the benchmark around major moving averages over the short-term until our window opens again later this month to adopt a more cautious allocation in the portfolio and wait for some of the more sustainable opportunities that we expect to materialize in the middle of this year.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Canada Labour Force Survey: The segments that are driving the strength in the economy and the ongoing exposure that is warranted in portfolios
- The concerning drop in transportation employment
- US Wholesale Trade and the above average increase in inventories
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Sentiment on Friday, as gauged by the put-call ratio, ended neutral at 0.98.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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