Market technicals point to a renewed short-term upswing in North American stocks, according to a Raymond James technical analyst, who attributes the backdrop to weakening upward pressure in U.S. 10-year Treasury yields.
Analyst Javed Mirza identified improving short-term price momentum across the S&P 500, TSX Composite, Nasdaq 100 and Russell 2000 following a two-week corrective phase that tested each index's 50-day moving average. Mirza noted that all four indices are currently trading above both their 50- and 200-day moving averages, which he interprets as confirmation that short- and intermediate-term price trends remain intact.
"A new short-term (2-4 week) equity market rally phase is underway that should have upside, by time, into July," Mirza wrote, signaling expectations for additional gains in the coming weeks.
In the fixed-income complex, Mirza sees short-term price momentum weakening for U.S. 10-year yields. He outlined a likely test of first support near 4.44% and said that a sustained move below that level would leave room for further decline toward 4.30%. These yield dynamics are already showing up in Treasury and corporate bond ETFs: both the iShares 20+ Year Treasury Bond ETF (TLT) and the iShares iBoxx USD High Yield Corporate Bond ETF (HYG) are displaying strengthening price momentum, which Mirza says supports a near-term rally in those instruments.
Rate-sensitive equity sectors stand to gain most from the yield pullback, Mirza added. He highlighted homebuilders and real estate investment trusts as particularly well-positioned, pointing to improving price momentum, stronger relative performance versus the S&P 500, and early signs of buying pressure in the SPDR S&P Homebuilders ETF (XHB) and the Real Estate Select Sector SPDR ETF (XLRE).
Two Canadian names were called out as specific opportunities within these themes: Canfor Corp. and Boardwalk REIT. Mirza cited these as examples of names that may benefit from the rotation into rate-sensitive segments.
The broader constructive stance is anchored in Raymond James' Market Cycle Model, which currently places equity markets in Phase 2, characterized as the "Boring Middle." That phase is associated with outperformance in technology, industrials and basic materials. Mirza said this phase "remains intact," supported by a sector rotation back toward information technology following recent consolidation.
Looking beyond the near-term rally, Mirza anticipates the current upswing extending into the summer, but he also flagged a potential intermediate-term correction in the August-to-October window. He expects that correction to coincide with a gradual transition toward Phase 3 of Raymond James' cycle framework.
Raymond James' year-end 2026 target for the S&P 500 was noted in Mirza's commentary as 7,940.
Contextual observations:
- Short-term price momentum has improved across several major indices after a corrective test of 50-day moving averages.
- Weakening momentum in U.S. 10-year yields is a primary technical catalyst cited for the equity rally.
- Bond ETFs TLT and HYG are showing strengthening momentum that dovetails with lower yields and the near-term move in risk assets.
Mirza's technical read offers a clear near-term bullish case accompanied by an explicit potential timing risk later in the year, leaving market participants with a rally thesis into July but with an eye toward a possible correction in the August-to-October period.