Tech Talk for Tuesday May 21st 2024
U.S. equity index futures were mixed this morning. S&P 500 futures were down 3 points at 8:35 AM EDT
The Canadian Dollar dropped 0.18 to US$73.24 following release of Canada's Consumer Price Index at 8:30 AM EDT. Consensus was an increase of 0.5% versus a gain of 0.6% in March. Actual was an increase of 0.5%. On a year-over-year basis consensus was an increase of 2.7% versus a gain of 2.9% in March. Actual was an increase of 2.7%
Palo Alto Networks dropped $27.02 to $296.75 after high hopes for third quarter results failed to reach analysts' estimates.
Zoom dropped $0.49 to $63.60 after offering second quarter guidance below consensus.
JP Morgan Chase dropped $27.02 to $296.75 after chairman Jamie Diamond hinted that he may retire earlier than scheduled.
Macy's added $0.79 to $19.89 after reporting higher than consensus first quarter earnings. The company also raised guidance.
EquityClock Highlight for May 21st
The energy sector may have pulled back in recent weeks, but the fundamental, technical, and seasonal paths remain conducive to further gains through the weeks ahead.
See: https://equityclock.com/2024/05/18/stock-market-outlook-for-may-21-2024/
The Bottom Line
The "bulls" regained control of U.S. equity markets last week. S&P 500 Index, Dow Jones Industrial Average and NASDAQ Composite Index broke to all-time highs. Leadership was provided by technology sector: Technology SPDRs (Symbol: XLK) moved above $212.00 to an all-time high. A speculative spike in the "Meme stocks" also contributed to bullish sentiment.
The TSX Composite Index also closed at an all-time high on Friday.
Strength in U.S. and Canadian equity indices once again was surpassed by strength in key international equity index prices and their related Exchange Traded Funds last week. Emerging markets iShares (symbol: EEM) advanced 3.06%, Asia 50 iShares (symbol: AIA) advanced 3.94% and China large cap iShares (symbol: FXI) jumped 5.62%. Europe iShares gained another1.54%, up 8.96% from its low in mid-April.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Higher than consensus first quarter results released to date prompted analysts to increase their first quarter earnings estimates again. Ninety three percent of S&P 500 companies have reported first quarter results to date. Consensus on a year-over-year basis calls for an earnings increase of 5.7% (versus a 5.4% increase last week). Revenues are expected to increase 4.2% (versus 4.1% last week)
Earnings gains accelerate in the second and third quarters, but at a lower than previous rates. Consensus for the second quarter calls for a 9.2% earnings increase (versus 9.3% last week) and a 4.6% increase in revenues. Consensus for the third quarter calls for an 8.2% increase in earnings (versus 8.4% last week) and a 4.9% increase in revenues.
Earnings gains accelerate further in the fourth quarter. Consensus for the fourth quarter calls for a 17.4% increase in earnings and a 5.5% increase in revenues (versus a 5.4% increase last week).
For all of 2024, consensus calls for an 11.1% earnings increase and a 5.0% increase in revenues.
Estimated gains for fiscal 2025 increased slightly. Consensus calls for a 14.1% earnings increase (versus a previous 14.0% increase) and a 5.8% revenue increase.
Economic News This Week
Source: www.Investing.com
April Canadian Consumer Price Index is released at 8:30 AM EDT on Tuesday
April U.S. Existing Home Sales released at 10:00 AM EDT on Wednesday are expected to slip to 4.18 million units from 4.19 million units in May.
April U.S. New Home Sales released at 10:00 AM EDT on Thursday are expected to drop to 680,000 units from 693,000 units in May.
April Durable Goods Orders released at 8:30 AM EDT on Friday are expected to drop to 0.5% from 2.6% in March.
March Canadian Retail Sales are released at 8:30 AM EDT on Friday.
May Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to drop to 67.4 from 77.2 in April.
Selected Earnings News This Week
Source: www.Investing.com
Seventeen S&P 500 companies are scheduled to report quarterly earnings this week. Focus is on Nvidia's report on Wednesday. In Canada, Toronto Dominion Bank is the first major bank to report fiscal second quarter results.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 17th 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 May 17th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 17th 2024
Green: Increase from previous day
Red: Decrease from previous day
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
Links offered by valued providers
Larry Williams: Dow 40k, Cycle Analysis, and Lessons Learned
Larry Williams: Dow 40k, Cycle Analysis, and Lessons Learned - YouTube
Mark Leibovit: Is It Time to "Sell in May"? May 16, 2024
Mark Leibovit: Is It Time to "Sell in May"? May 16, 2024 - YouTube
TOP 10 Stock Picks for May 2024: David Keller and Grayson Roze
TOP 10 Stock Picks for May 2024 - YouTube
Mike's Money Talks for May 18th 2024
mikes-content (mikesmoneytalks.ca)
The One Chart to Watch as S&P 500 Makes New All-Time Highs: David Keller
The One Chart to Watch as S&P 500 Makes New All-Time Highs | The Mindful Investor | StockCharts.com
Bitcoin Sets Up with Classic Continuation Signal
Bitcoin Sets Up with Classic Continuation Signal | Art’s Charts | StockCharts.com
Gold Is Doing Great! Carl Swenlin
Gold Is Doing Great! | DecisionPoint | StockCharts.com
How long can Dow keep hitting record highs? Bob Hoye
Bond Vigilantes Hard at Work - HoweStreet
Forest Fires Could Cut Alberta Oil Production Josef Schachter
Forest Fires Could Cut Alberta Oil Production - HoweStreet
Where Are We In the Equities Cycle? Danielle Park
Where Are We In the Equities Cycle? - HoweStreet
Trading Desk Notes For May 18, 2024 Victor Adair
Trading Desk Notes For May 18, 2024 - HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.com
Technical Notes for Friday
Silver Bullion iShares $SLV moved above $27.24 and $27.98 to a 10 year high extending an intermediate uptrend. TSE Silver Bullion iShares $SVR.TO moved above $Cdn$14.46 extending an intermediate uptrend.
Metals and Mining SPDRs $XME moved above $63.59 to a two year high extending an intermediate uptrend.
Junior Gold Miners ETF $GDXJ moved above $44.70 to a two year high extending an intermediate uptrend.
Uranium ETF $URA moved above $32.60 to a 10 year high extending an intermediate uptrend. Strength was triggered by banning import of uranium from Russia. Cameco, (Symbols: CCJ in U.S. dollars and CCO.TO in Canadian Dollars) one of the world's largest producers reached a multi-year high.
U.S. Insurance iShares $IAK moved above $117.60 to an all-time high extending an intermediate uptrend. Strength was led by MetLife on a move above $74.10 to an all-time high.
Rio Tinto $RIO one of the world's largest base metals producers moved above $72.10 extending an intermediate uptrend.
Emera $EMA.TO a TSX 60 stock moved above Cdn$50.27 extending an intermediate uptrend.
Restaurant Brands International $QSR.TO a TSX 60 stock moved below Cdn$96.11 completing a Head & Shoulders pattern.
S&P 500 Momentum Barometers
The intermediate term Barometer added 1.40 on Friday and gained 6.00 points last week to 64.00. It changed last week from Neutral to Overbought on a move above 60.00. Daily trend remains up.
The long term Barometer added 0.40 on Friday and gained 1.80 last week to 80.20. It remains Overbought. Daily trend is up.
TSX Momentum Barometers
The intermediate term Barometer added 1.79 on Friday and gained 5.83 to 69.06 last week to 69.06. It remains Overbought. Daily trend is up.
The long term Barometer added 0.90 on Friday and gained 2.24 last week to 72.20. 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
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