Stocks Entering Period of Seasonal Strength Today:
World Wrestling Entertainment, (NYSE:WWE)
Yum! Brands (NYSE:YUM)
The Markets
Stocks slipped on Monday as concerns over Greece turning its back on its debt obligations led to weakness in European benchmarks. The German DAX declined by 1.69%, the French CAC was lower by 0.85%, and the Spanish IBEX fell by 1.97%.
The Athens General Share benchmark shed 4.75%, maintaining the trend of lower-highs and lower-lows that dates back to April of last year. Seasonally, the Greek benchmark tends to perform positively between January and May, however, with the ongoing struggles continuing to overhang the European country, equities have yet shown anything close to the average gains for this time of year; a bottoming pattern has yet to materialize. Greek officials plan on meeting with creditors on Wednesday in hopes to discuss a compromise to current austerity measures; equity markets are likely to remain on edge until some kind of resolution has been met.
Despite the eurozone concerns that pressured broad equity benchmarks in the US lower during Monday’s session, sector activity remained “risk-on.” Losses during the session were led by Health Care, Consumer Staples, and Utilities, three defensive sectors that typically perform well during periods of investor uncertainty.
Cyclical sectors, including Energy, Industrials, and Materials ended around the flatline on the day, bucking the broad market loss. This risk-on sentiment remains a positive for the equity market as investors are more inclined to hold and even accumulate cyclical assets, while letting down their guard in defensive assets, such as bonds. The yield on the 5-Year Treasury Note is holding significant support around 1.2%; trendline resistance that stemmed from the 2007 high was recently tested as support. A break above resistance around 1.8% would confirm a new intermediate-term up-leg.
Sentiment on Monday, was gauged by the put-call ratio, ended bearish at 1.07.
Seasonal charts of companies reporting earnings today:
TSE Composite
Horizons Seasonal Rotation ETF (TO:HAC)
- Closing Market Value: $15.86 (down 0.06%)
- Closing NAV/Unit: $15.87 (down 0.03%)
Performance*
| 2015 Year-to-Date | Since Inception (Nov 19, 2009) | |
| HAC.TO | 4.89% | 58.7% |
* performance calculated on Closing NAV/Unit as provided by custodian
Disclaimer: 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.