Tech Talk for Monday August 19th 2024

U.S. equity index futures were higher this morning. S&P 500 futures were up 6 points at 8:30 AM EDT.

Shake Shack dropped $2.97 to $104.40 after Piper Sandler downgraded the stock.

Advanced Micro Devices added $3.95 to $152.57 after announcing a cash and stock purchase of privately owned ZT Systems for $4.9 billion.

Este Lauder dropped $8.73 to $89.28 after offering guidance lower than consensus.

GeoVax Labs jumped $3.71 to $10.75 after announcing development of an Mpox treatment

EquityClock's Stock Market Outlook for August 19th

The few bright spots in the manufacturing economy continue to present attractive

investment opportunities during this period of volatility for stocks.

https://equityclock.com/2024/08/17/stock-market-outlook-for-august-19-2024/

The Bottom Line

Focus this week is news from the Jackson Hole Symposium starting on Friday. Federal Reserve chairman Powell is expected to offer an outlook on U.S. inflation rates, employment rates and timing of a possible reduction in the Fed Fund Rate.

Consensus for Earnings and Revenues for S&P 500 companies

Source: www.factset.com

Quarterly earnings and revenue estimates were adjusted modestly last week. Ninety three percent of companies have reported second quarter results to date: 79% have reported higher than consensus quarterly earnings and 60% have reported higher than consensus revenues. Consensus for second quarter earnings advanced slightly to a 10.9% gain (versus a previous 10.8% gain) and consensus for second quarter revenues remained at a 5.2% gain.

A word of caution! Consensus for the third quarter earnings slipped again to a 5.2% increase (versus a previous 5.4% increase). Consensus for third quarter revenues was unchanged at a 4.9% increase.

Earnings gains accelerate in the fourth quarter. Consensus calls for a 15.5% increase in earnings (versus a previous 15.2% increase) and a 5.6% increase in revenues (versus a previous 5.4% increase).

For all of 2024, consensus calls for a 10.1% earnings increase (versus previous 10.2% increase) and 5.1% revenue increase.

Earnings gains remain elevated in 2025. First quarter earnings are expected to increase 14.4 % on a year-over-year basis (versus 14.5% last week) and revenues are expected to increase 5.9% (versus previous 5.8% increase). Second quarter earnings are expected to increase 13.9% (versus previous 14.0% increase) and revenues are expected to increase 5.8%. For all of 2025 earnings are expected to increase 15.3% (versus previous 14.0% gain) and revenues are expected to increase 6.0% (versus a previous 5.8% gain).

Economic News This Week

Source: www.Investing.com

July U.S. Leading Economic Indicators released at 10:00 AM EDT on Monday are expected to drop 0.3% versus a 0.2% decline in June.

Canadian July Consumer Price Index released at 8:30 AM EDT on Tuesday is expected to increase 0.3% versus a 0.1% decline in June.

U.S. July Existing Home Sales released at 10:00 AM EDT on Thursday are expected to increase to 3.89 million units from 3.39 million units in June.

Jackson Hole Symposium starts on Friday.

Canadian June Retail Sales released at 8:30 AM EDT on Friday are expected to increase 0.1% versus a 0.8% decline in May.

July U.S. New Home Sales released at 10:00 AM EDT on Friday are expected to increase to 630,000 from 617,000 in June.

Selected Earnings reports this week

Source: www.Investingcom

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for August16th 2024

Green: Increase from previous day

Red: Decrease from previous day

Source for all positive seasonality ratings: www.EquityClock.com

Commodities

Daily Seasonal/Technical Commodities Trends for August 16th 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for August16th 2024

Green: Increase from previous day

Red: Decrease from previous day

Links offered by valued providers

What Inflation Fear? Strong Retail Sales Fuel Growth: David Keller

What Inflation Fear? Strong Retail Sales Fuel Growth - YouTube

Small caps are in the process of a multi-year bottom, says Fundstrat’s Tom Lee

Small caps are in the process of a multi-year bottom, says Fundstrat’s Tom Lee - YouTube

The Fed’s September cut will have a psychological effect: The Conference Board’s Dana Peterson

The Fed’s September cut will have a psychological effect: The Conference Board’s Dana Peterson - YouTube

Gold, Stock Market and Bond Triggers:TheTechnicalTraders

Gold, Stock Market and Bond Triggers - YouTube

Michael Campbell's Money Talks for August 17th

Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)

Ross Clark, Mark Leibovit and John Rubino

This Week in Money - HoweStreet

Markets Showing Signs of Major Fall Correction Bob Hoye

Markets Showing Signs of Major Fall Correction - HoweStreet

These Groups Just Turned BULLISH! Mary Ellen McGonagle

https://www.youtube.com/watch?v=xhTB4mQwGkc

Weekly Update with Larry Berman – August 17, 2024

https://www.youtube.com/watch?v=rKTtmytV8yc

Two Wars And Geopolitical Tensions Have Lifted The Crude Oil War Premium Over US$10/b. Josef Schachter

Two Wars And Geopolitical Tensions Have Lifted The Crude Oil War Premium Over US$10/b. - HoweStreet

Technical Scoop from David Chapman and www.EnrichedInvesting.com

See link for August 19th:

https://enrichedinvesting.com/library/

Notes for Wolf and Jack for August 15th 2024

Don Vialoux was a guest on "Wolf on Bay Street" on Thursday. The interview was released on Corus Radio 640 on Saturday evening. Following are notes developed for the interview:

The pause that refreshes! North American equity indices are expected to move slightly lower between now and early October, but weakness will provide a buying opportunity for investors.

North American equity indices are following their traditional pattern during a U.S. Presidential Election Year: strength until July, followed by a period of political and economic uncertainty when candidates for the next President and his/her agenda are selected, followed by resumption of an upward trend when the next President's agenda raises hope for change in his/her promised platform. History shows that strength in North American equity indices after the Presidential Election normally occurs regardless of selection of a Democrat or a Republican winner. This year, the S&P 500 Index reached a seasonal peak in the third week of July and the TSX Composite reached a seasonal peak on August 1st

A slowdown in earnings gains in the third quarter by major U.S. companies is expected to prompt a shallow equity market correction this summer. Consensus calls for a drop in earnings growth by S&P 500 companies from a 10.8% year-over-year gain in the second quarter to only a 5.4% gain in the third quarter.

The slowdown in earnings growth in the third quarter is expected to be followed by a reacceleration of earnings gains in the fourth quarter and beyond. Consensus calls for a year-over-year 14.5% gain by S&P 500 companies in the fourth quarter and a 14% gain in 2025.

From now until September 18th traders are expected to focus on speculation about the FOMC's next announcement on U.S. interest rates. Consensus calls for a reduction of the Fed Fund Rate from its current 5.25%-5.50% rate by at least 0.25% and possibly by 0.50% on September 18th. However, economic uncertainty on inflation and employment rates prior to September 18th could trigger greater volatility in North American equity markets, one way or the other. Preferred strategy by investors is to use short term weaknesses in North American equity markets, if they occur between now and October, to add to favoured equities.

Traders looking for special situations between now and October can consider trades in gold, natural gas and/or their equity equivalents:

Gold bullion has a period of seasonal strength from July 15th to October 15th. Short term technicals for gold currently are encouraging: Its intermediate trend is up and its strength relative to the S&P 500 Index and TSX Composite Index currently is positive. A potential selection for the trade is Gold Bullion iShares (Symbol: CGL.TO)

Natural gas has a period of seasonal strength from July 27th to October 15th. Preferred choice for Canadian investors is to own the United States 12 month natural gas ETF (Symbol: UNL). During the past two weeks, technicals for UNL have improved significantly: The fund bounced from long term support near US $7.20 and has started to outperform the S&P 500. Demand in North America for natural gas this season is expected to be greater than usual as higher than average temperatures prompt higher than usual demand needed to power air conditioning. In addition, higher than normal temperatures in the Gulf of Mexico could prompt more frequent hurricanes that could curtail offshore natural gas production.

Technical Notes for Friday

Aerospace & Defense ETF $PPA moved above $110.25 to an all-time high extending an intermediate uptrend.

iShares gold bullion CGL.TO moved above Cdn$19.74 to an all-time high extending an intermediate uptrend. Gold bullion SPDRs $GLD moved above US$229.65 to an all-time high.

Barrick Gold $ABX.TO a TSX 60 stock moved above Cdn$26/58 extending an intermediate uptrend.

Open Text $OTEX a TSX 60 stock moved above US$31.94 completing a double bottom pattern.

Technical Scores

Calculated as follows:

Intermediate Uptrend based on at least 20 trading days: Score 2

          (Higher highs and higher lows)

Intermediate Neutral trend: Score 0

          (Not up or down)

Intermediate Downtrend: Score -2

          (Lower highs and lower lows)

Outperformance relative to the S&P 500 Index: Score: 2

Neutral Performance relative to the S&P 500 Index: 0

Underperformance relative to the S&P 500 Index: Score -2

Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: -1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: -1

Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.

Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower

Changes Last Week

S&P 500 Momentum Barometers

The intermediate term Barometer added 2.20 on Friday and gained 11.00 last week to 69.00. It changed from Neutral to Overbought on a move above 60.00. Daily trend is up.

The long term Barometer added 0.20 on Friday and gained 5.40 last week to 73.80. It remains Overbought. Daily trend is up.

TSX Momentum Barometers

The intermediate term Barometer slipped 0.44 on Friday, but gained 17.26 last week to 68.14. It changed from Neutral to Overbought on a move above 60.00. Daily trend is up.

The long term Barometer slipped 0.89 on Friday, but gained 5.31 points last week. It remains Overbought. Daily trend is up.

Disclaimer: Seasonality ratings and technical ratings offered in this report and at

www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed