Skip to main content

The Globe and Mail

Scotia sticks to bullish call on S&P 500 despite a tough August

Traders work on the floor of the New York Stock Exchange, July 29, 2013.

SHANNON STAPLETON/REUTERS

Globe editors have posted this research report with permission of  Scotia Capital Inc. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following text is excerpted from the report:

Summer trading activity has been dominated by the pending shift in U.S. monetary policy and the continued increase in long-term treasury yields. We believe tapering's influence will stay in the spotlight.

The annual focus on seasonality is also sure to make headlines. September/October are the worst months of the year for the S&P 500.

Story continues below advertisement

Our positive equity bias is unchanged, and we plan to stay constructive on the S&P 500 as long as jobless claims keep improving. August was tough for the U.S. benchmark, but it feels premature to pound the table as challenging seasonality and Fed policy volatility lie ahead. The S&P 500 could retest its 200-day moving average (-5 per cent). A shift in regional leadership may also occur, especially amongst the developed markets group, and U.S. domestic cyclicals (financials, discretionary) could lag global cyclicals (energy, base metals, industrials) as Euro/China data momentum picks up.

Read the full report here.

Read other reports here.

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.