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Stock Market Outlook for July 10, 2020


Progress continues to be made on the continued jobless claim count, but there is still a long way to go to return to levels that would be considered normal for this time of year.

 

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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sina.com (NASD:SINA) Seasonal Chart

Maverix Metals Inc. (TSE:MMX.TO) Seasonal Chart

Motorola Solutions Inc. (NYSE:MSI) Seasonal Chart

Donaldson Co, Inc. (NYSE:DCI) Seasonal Chart

SPDR MSCI ACWI IMI ETF (AMEX:SPGM) Seasonal Chart

 

 

The Markets

A down day for equity markets as investors expressed concern over the rising case count of coronavirus in the US.  The S&P 500 Index shed just over half of one percent, weighed down by the core cyclical areas of the market, mainly energy, financials, and industrials, essentially those areas that would be sensitive to a re-closure of the economy.  The benchmark cracked a number of short-term levels of support intraday, but managed to hold those levels by the closing bell.  The 20-day moving average, from which the benchmark broke above last week, managed to support the benchmark around the lows of of Thursday’s session.  MACD remains on a buy signal, which was trigged in the previous session.  The short-term consolidation in the benchmark in recent days has caused the daily momentum indicators to start to roll over, which will require further monitoring to assure that Wednesday’s buy signal with respect to MACD is not violated.

On the economic front, a report on wholesale sales and inventories was released during Thursday’s session.  The headline print indicated that inventories declined by 1.2% in May, inline with the consensus analyst estimate, while sales increased by 5.4%.  Stripping out the seasonal adjustments, wholesale sales actually increased by 3.1%, which is inline with the 3.2% increase that is average for the month of May.  Inventories, meanwhile, were lower by 2.2%, weaker than the 0.7% decline that is average for this time of year.  Sales are now trending 22.4% below the seasonal average trend, while inventories are now hovering 5.0% below the seasonal norm.  The trends for each are amongst the weakest on record.  On the sales side, there is really only one category that is holding up well compared to seasonal norms.  Computer/computer peripheral/software sales have shown little deviation versus its seasonal average trend this year, remaining resilient in this pandemic environment.  As has been emphasized constantly over many months, technology is one of the few sectors that check off every box to our approach, showing superior technical, fundamental, and seasonal characteristics.  The stock prices have reacted accordingly, significantly outperforming the market.  Subscribers can login to the chart database to view the wholesale sales seasonal charts at the following link: https://charts.equityclock.com/u-s-wholesale-trade-sales-and...

 

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.77.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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