Tech Talk for Monday December 18th 2023
U.S. equity index futures were higher this morning. S&P 500 futures were up 12 points at 8:30 AM EST.
U.S. Steel advanced $11.22 to $50.55 after Nippon Steel offered to buy the company for $ 55.00 per share. Value of the cash offer is estimated at $14.1 billion.
VF Corp dropped $1.15 to $18.76 after disclosing that the company is the victim of a cyberattack
Masonite dropped $2.00 to $100.00 after Wedbush downgraded the stock from Outperform to Neutral.
Micron added after Wedbush raised its target price from $80 to $95.
Link to Technical Scoop from David Chapman and www.EnrichedInvesting.com
The Bottom Line
North American equity indices are entering their strongest period of seasonal strength in the year. According to www.EquityClock.com "Santa Claus delivers a positive bias surrounding the end of the year with the traditional rally period spanning from December 15th to January 6th. The average return of the S&P 500 during the approximately three-week span that encompasses the back half of December and the first few days of January is 2.05% and it has seen positive results in 74% of periods over the past five decades" The TSX Composite Index has a similar track record. The Index has gained 85% of the past 33 periods for an average return per period of 2.00%.
Tom Bowley from www.StockCharts.com recently offered a similar seasonality study focusing on the S&P 500 Index from December 21 to December 31 for the past 72 years. Average daily annualized returns on the S&P 500 since 1950 were as follows:
For the entire Dec 21-31 period, the annualized return of +40.21% is more than 4x the average S&P 500 return of roughly 9% since 1950. S&P 500 prices rarely see a cumulative loss during these final 11 days of the year.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Analysts slightly lowered earnings and revenue estimates to the end of 2024:
Earnings estimates for the fourth quarter of 2023 were reduced slightly. Fourth quarter earnings are expected to increase 2.4% (versus previous increase of 2.7%). Fourth quarter revenues are expected to increase 3.1% (versus previous increase of 3.2%). For all of 2023, consensus calls for an earnings increase of 0.6% (versus previous increase of 0.7%). Revenues are expected to increase 2.3%.
The recovery becomes more apparent in the first quarter of 2024 and accelerates as the year progress. Consensus for the first quarter on a year-over-year basis calls for an earnings increase of 6.2 % (versus previous increase of 6.8%) and a revenue increase of 4.3% (versus previous increase of 4.4%). Consensus for the second quarter calls for a 10.5% earnings increase (versus previous increase at 10.8%) and a 5.2% increase in revenues (versus previous increase of 5.0%). Consensus for the third quarter calls for an 8.7% increase in earnings (versus previous increase of 9.0%) and a 5.2% increase in revenues. Consensus for the fourth quarter calls for an 18.1% increase in earnings (versus previous increase of 18.2%) and a 5.8% increase in revenues (versus previous increase of 5.7%). For 2024, consensus calls for an 11.5% increase in earnings (versus a previous increase of 11.8%) and a 5.5% increase in revenues (versus a previous increase of 5.5%)
Economic News This Week
Source: www.investing.com
U.S. November New Home Starts released at 8:30 AM EST on Tuesday are expected to ease to 1.360 million units from 1.472 million units in October.
Canadian November Consumer Price Index is released at 8:30 AM EST on Tuesday
U.S. November Existing Home Sales released at 10:00 AM EST on Wednesday are expected to slip to 3.78 million units from 3.79 million units in October.
Update on U.S. third quarter real GDP released at 8:30 AM EST on Thursday is expected to remain unchanged at annualized growth at a 5.2%.
December Philly Fed released at 8:30 AM EST on Thursday is expected to improve to -3.0 from -5.9 in November
Canadian October Retail Sales are released at 8:30 AM EST on Thursday.
U.S. November Leading Economic Indicators released at 10:00 AM EST on Thursday are expected to drop 0.4% versus a drop of 0.8 in October.
November Durable Goods Orders released at 8:30 AM EST on Friday are expected to increase 1.7% versus a decline of 5.4% in October
November PCE Price Index is released at 8:30 AM EST on Friday Also, November Core PCE Price Index is released.
November Personal Spending released at 8:30 AM EST on Friday is expected to increase 0.4% versus a gain of 0.2% in October. November Personal Income is expected to increase 0.2% versus a gain of 0.2% in October.
October Canadian GDP released at 8:30 AM EST on Friday is expected to increase 0.2% versus a gain of 0.1% in September.
December Michigan Consumer Sentiment released at 10:00 AM EST on Friday is expected to increase to 69.4 from 61.3 in November.
U.S. November New Home Sales released at 10:00 AM EST on Friday are expected to increase to 695,000 units from 679,000 units in October.
Selected Earnings News This Week
Source: www.investing.com
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Dec.15th 2023
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 Dec.15th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for Dec.15th 2023
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
Technical Notes for Friday
NASDAQ 100 Trust Units QQQ moved above $403.43 to an all-time high extending an intermediate uptrend.
American Express $AXP a Dow Jones Industrial Average stock moved above $180.12 extending an intermediate uptrend.
Microchip Technologies $MCHP a NASDAQ 100 stock moved above $93.33 to an all-time high extending an intermediate uptrend.
Links offered by valued providers
Silver's window of opportunity is closing, with prices poised for an 'explosive move' in 2024
Epic Double Top Nearly Complete … Prepare for the Bear! | Your Daily Five (12.15.23)
https://www.youtube.com/watch?v=cBXKfIcpwHY
Mike Wilson's 2024 Stock Market Outlook | On The Tape Investing Podcast
https://www.youtube.com/watch?v=dDx5d8iDDDo
Fed Preps For Rate Cut Shift
https://www.youtube.com/watch?v=aYd13T1ciCI
Mike's Money Talks for December 16th
https://mikesmoneytalks.ca/december-16th-episode/
Larry Williams 2024 Market Outlook | The Final Bar (12.15.23)
Larry Williams 2024 Market Outlook | The Final Bar (12.15.23) - YouTube
Don’t Miss The Move Into These NEW Areas! | The MEM Edge (12.15.23)
Don’t Miss The Move Into These NEW Areas! | The MEM Edge (12.15.23) - YouTube
Energy Sector Finally Becoming Bullish? | DecisionPoint | 12.14.23
Energy Sector Finally Becoming Bullish? | DecisionPoint | StockCharts.com
Could Santa Claus Rally be a good sign for the New Year? Mark Leibovit 12.14.23
December 15, 2023 | Opportunities Building in Gold Sector Bob Hoye
Opportunities Building in Gold Sector - HoweStreet
Trading Desk Notes For December 16, 2023: Victor Adair
Trading Desk Notes For December 16, 2023 - HoweStreet
December 15, 2023 | Get Ready for a 1986 Repeat of a Real Estate Crash? Martin Armstrong
Get Ready for a 1986 Repeat of a Real Estate Crash? - HoweStreet
S&P 500 Momentum Barometers
The intermediate term Barometer slipped 2.20 on Friday, but added 4.60 last week to 87.60. It remains Overbought.
The long term Barometer dropped 3.00 on Friday, but added 8.60 last week to 75.00. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer dropped 6.17 on Friday and slipped 1.77 last week to 70.04. It remains Overbought.
The long term Barometer dropped 5.29 on Friday, but added 2.20 last week to 52.42. It remains Neutral.
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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