Weekly Fundamental US Stocks Forecast: Neutral
- Seasonality studies going back 20-years show August is generally positive, with the second half of the month producing the majority of gains during the month.
- US equity markets can continue to trade higher in the short-term – at least until the Federal Reserve’s Jackson Hole Economic Policy Symposium later this month.
- The IG Client Sentiment Index[1] suggests thatUS stocks have a mixed bias in the near-term.
US Stocks Week in Review
It was another strong week for US equity markets, as decelerating price pressures, per the July US inflation report, eased concerns about the Federal Reserve continuing along its aggressive rate hike path. The US S&P 500[2] added +3.24%, the tech-heavy US Nasdaq[3] 100 gained +2.64%, and the small-cap focused US Russell 2000 added an impressive +4.95%. The combined pullback in short-end US Treasury yields and volatility measures remain instrumental in the rebound transpiring across US equity markets – which has officially entered bull market territory (>+20% off the lows).
Seasonality Favors Gains in US Equity Markets
The first two weeks of August have clocked gains for US equity markets, in line with historical tendencies. Seasonality studies going back 20-years show August is generally positive, with the second half of the month producing the majority of gains during the month, per data gathered from EquityClock.com.
US S&P 500 Seasonality: DAILY TIMEFRAME (20-year average) (CHART 1)
Source: EquityClock.com
US Nasdaq 100 Seasonality: DAILY TIMEFRAME (20-year average) (CHART 2)
Source: EquityClock.com
US Russell 2000 Seasonality: DAILY TIMEFRAME (20-year average) (CHART 3)
Source: EquityClock.com
With US real GDP tracking at +2.5% annualized in 3Q’22 per the Atlanta Fed GDPNow growth tracker, coupled with generally positive earnings (75% of S&P 500 companies have reported a positive EPS
