Ahead Of Friday’s Open
Tech Talk | Jul 25, 2014 06:49AM ET
- Durable Goods Orders for June will be released at 8:30am. The market expects a month-over-month increase of 0.5% versus a decline of 1.0% previous. Excluding Transportation, orders are expected to increase by 0.7% versus a decline of 0.1% previous.
- German IFO Survey for July will be released at 4:00am EST. The market expects Economic Sentiment to show 109.4 versus 109.7 previous. The survey of Current Conditions is expected to show 114.5 versus 114.8 previous. Business Expectations is expected to show 104.5 versus 104.8 previous.
- Great Britain GDP for the Second Quarter will be released at 4:30am EST. The market expects a year-over-year increase of 3.1% versus an increase of 3.0% previous.
Stocks finished mixed on Thursday as investors reacted to a mixed set of economic reports. Initial Jobless Claims was reported to have fallen to a seasonally adjusted 284,000, a new recovery low and the lowest since 2006. Auto sector shutdowns during the summer months typically result in an uptick in the level of claims, however, this seasonal phenomena is not being picked up in the data as of yet. Claims typically rise into the month of August as summer jobs wind down. Offsetting the upbeat news pertaining to employment in the US was the report on new home sales for the month of June, which abruptly dropped by over 8%. New home sales have plateaued since hitting a peak early last year, just as mortgage rates hit their lows; housing stocks have suffered as a result, vastly underperforming the market since the end of February. A head-and-shoulders topping pattern has become evident on the chart of the S&P Homebuilders Select Industry Index ETF, which would be fulfilled with a break below the neckline around $30; downside potential of the bearish setup points to $26, or 16% below present levels. Housing stocks remain in a period of seasonal weakness through to October.
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Flipping back to the automobile industry, with the looming shutdowns in the industry, automobile stocks tend to dip around this time of year as production slows. The industry underperforms the S&P 500 Index by 8%, on average, between now and November, acting as one of the weakest industries within the market through the remainder of summer. The Global Auto Index Fund (CARZ) is now starting to show underperformance versus the broad market as constituents within the benchmark roll over from overbought territory. Significant support for the Auto Index Fund can be found at the previous level of resistance at $40, below which a downside move to the next level of support around $37.50 seems logical.
Seasonal charts of companies reporting earnings today:
Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.91.
h3Horizons Seasonal Rotation ETF (TO:HAC)
- Closing Market Value: $14.66 (down 0.20%)
- Closing NAV/Unit: $14.66 (down 0.16%)
Performance*
| 2014 Year-to-Date | Since Inception (Nov 19, 2009) | |
| HAC.TO | 2.52% | 46.6% |
* performance calculated on Closing NAV/Unit as provided by custodian
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