Tech Talk for Monday August 12th 2024

U.S. equity index futures were higher this morning. S&P 500 futures were up 18 points at 8:30 AM EDT.

Keycorp added $1.85 to $16.46 and Bank of Nova Scotia gained $0.55 to US$46.92 after Bank of Nova Scotia purchased a 14.9% interest in Keycorp for US$2.8 billion.

U.S. food stocks including General Mills, Mondelez, Hershey and Kraft Heinz moved higher after Goldman Sachs upgraded the sector.

Barrick Gold added $0.39 to US$17.80 after reporting higher than consensus second quarter earnings. The company also raised its dividend.

EquityClock's Stock Market Outlook for Monday August 12th

The weakest July change on record for Canadian Retail employment suggests that the consumer has cashed out. See:

https://equityclock.com/2024/08/10/stock-market-outlook-for-august-12-2024/

The Bottom Line

Focus this week is on U.S. inflation and its impact on U.S. interest rates. Growth in Producer and Consumer Prices on a year-over-year basis continues to trend down, but at a lower rate. Traders will watch closely the July PPI report on Tuesday and the July CPI report on Wednesday.

Second quarter results released to date by S&P 500 companies have been a pleasant surprise, nicely exceeding estimates offered since the second week in July. Consensus estimates for the remainder of 2024 were lowered slightly last week, but continue to show accelerating earnings growth beyond the third quarter.

Seasonal influences on U.S. equity markets during U.S. Presidential Election years tend to show modest weakness between August and early October, followed by strength from late October until at least the end of the year regardless of who wins the election. See chart in Tom Bowley's video link below showing seasonality by U.S equity markets during U.S. Presidential Years since 1950. His chart is identical to the chart offered by www.EquityClock.com

Consensus for Earnings and Revenues for S&P 500 companies

Source: www.factset.com

Reports released last week prompted analysts to lower their quarterly earnings and revenue estimates for 2024. Ninety one percent of companies have reported second quarter results to date: 78% have reported higher than consensus quarterly earnings and 59% have reported higher than consensus revenues. Consensus for second quarter earnings slipped last week to a 10.8% gain (versus a previous 11.5% gain) and consensus for second quarter revenues slipped to a 5.2% gain (versus a previous 5.3% gain).

A word of caution! Consensus for the third quarter earnings slipped to a 5.4% increase (versus a previous 6.1% increase). Consensus for third quarter revenues was unchanged at a 4.9% increase.

Earnings gains accelerate in the fourth quarter, but at a lower rate. Consensus calls for a 15.2% increase in earnings (versus a previous 16.1% increase) and a 5.4% increase in revenues.

For all of 2024, consensus calls for a 10.2% earnings increase (versus previous 10.8% increase) and 5.1% revenue increase.

Earnings gains accelerate in 2025, but at a lower than previous rate. First quarter earnings are expected to increase 14.5 % on a year-over-year basis (versus 14.8% last week) and revenues are expected to increase 5.8% (versus previous 5.9% increase). Second quarter earnings are expected to increase 14.0% (versus previous 13.5% increase) and revenues are expected to increase 5.8% (versus previous 5.9% increase). For all of 2025 earnings are expected to increase 14.0% (versus previous 14.8% gain) and revenues are expected to increase 5.8% (versus a 6.0% gain).

Economic News This Week

Source: www.Investing.com

July U.S. Producer Price Index released at 8:30 AM EDT on Tuesday is expected to increase 0.1% versus a gain of 0.2% in June.

July U.S. Consumer Price Index released at 8:30 AM EDT on Wednesday is expected to increase 0.2% versus a decline of 0.1% in June. On a year-over-year basis, July CPI is expected to increase 2.9% versus a 3.0% increase in June. Excluding food and energy, July CPI is expected to increase 0.2% versus a gain of 0.1% in June. Excluding food and energy, July core CPI is expected to increase 3.2% versus a gain of 3.3% in June.

July U.S. Retail Sales released at 8:30 AM EDT on Thursday are expected to increase 0.3% versus no change in June.

August Empire State Manufacturing Survey released at 8:30 AM EDT on Thursday is expected to improve to -6.00 from -6.60 in July.

August Philly Fed released at 8:30 AM EDT on Thursday is expected to drop to 7.0 from 13.9 in July.

July U.S. Capacity Utilization released at 9:15 AM EDT on Thursday is expected to slip to 78.6% from 78/8% in June. July Industrial Production is expected to increase 0.1% versus a gain of 0.6% in June.

July U.S. Housing Starts released at 8:30 AM EDT on Friday are expected to slip to 1.350 million units from 1.363 million units in June.

August Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to improve to 66.7 from 66.4 in July.

Selected Earnings Report News This Week

Source: www.Investing.com

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for August 9th 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 9th 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for August 9th 2024

Green: Increase from previous day

Red: Decrease from previous day

Links offered by valued providers

DON’T TRUST This Market Rebound! Tom Bowley

DON’T TRUST This Market Rebound! - YouTube

Dramatic Shift in Sentiment Suggests MORE PAIN Ahead: David Keller

https://www.youtube.com/watch?v=Odn0pQHUI5Y

Earnings Insight: S&P 500 Q2 Revenue Growth Update: Guy Adami and Dan Nathan

https://www.youtube.com/watch?v=kUE6tSGXpbk

Is Argentina's Hyperinflation The Fate For Every Country? David Skarica

Is Argentina's Hyperinflation The Fate For Every Country? - HoweStreet

US Industrial Production Drop a Concern: Mark Leibovit

https://www.howestreet.com/2024/08/us-industrial-production-drop-a-concern-mark-leibovit/

Michael Campbell's Money Talks for August 10th

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

Who let the DOG out? Bruce Fraser

Who Let the DOG Out? | Wyckoff Power Charting | StockCharts.com

Trillions Spent on Climate Change a Waste of Money? Bob Hoye

Trillions Spent on Climate Change a Waste of Money? - HoweStreet

Be Prepared for Another Stock Market Shock Josef Schachter

Be Prepared for Another Stock Market Shock - HoweStreet

Lower Interest Rates Won't Instantly Solve Slow Economy Danielle Park

Lower Interest Rates Won't Instantly Solve Slow Economy - HoweStreet

Trading Desk Notes for August 10, 2024 Victor Adair

Trading Desk Notes for August 10, 2024 - HoweStreet

Technical Scoop by David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/wp-content/uploads/2024/08/Weathered-insurance-ambivalent-jobs-volatility-normality-raised-rates-precious-gain-geopolitical-energy.pdf

Technical Note for Friday

Simon Properties $SPG an S&P 100 stock moved above $158.50 to an all-time high extending an intermediate uptrend.

Changes Last Week

S&P 500 Momentum Barometers

The intermediate term Barometer added 3.20 on Friday and gained 2.00 last week to 58.00. It remains Neutral.

The long term Barometer slipped 0.80 on Friday and dropped 1.20 last week to 58.40. It remains Neutral.

TSX Momentum Barometers

The intermediate term Barometer slipped 0.88 on Friday and dropped 5.76 last week to 50.88. It remains Neutral.

The long term Barometer was unchanged on Friday, but slipped 1.33 last week to 70.35. It remains Overbought.

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