Tech Talk for Monday June 10th 2019

U.S. equity index futures were higher this morning. S&P 500 futures were up 13 points in pre-opening trade. Index futures responded to news that the U.S. and Mexico have reached an agreement that will postpone tariffs on Mexican imports to the U.S.

The Canadian Dollar slipped 0.04 to U.S.75.32 cents following the Canadian May Housing Starts report released at 8:15 AM EDT. Consensus was 205,000 units versus 233,000 units in April. Actual was 202,300 units

Raytheon gained $18.09 to $204.00 after receiving an offer to merge with United Technologies. Each Raytheon share will receive 2.3348 shares in the new combined company.

Tableau Software gained $42.79 to $168.00 after receiving a $15.7 billion takeover offer by Salesforce.com. Each Tableau share will be exchanged for 1.103 shares of Salesforce.com. Value of the offer is estimated at $177.88.

Tilray added $6.55 to $45.35 after reaching an agreement with Privateer Holdings to extend its share lockup.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/06/07/stock-market-outlook-for-june-10-2019/

Note seasonality charts on Non-farm Payrolls and Canada Labour Force.

The Bottom Line

Most developed equity markets in the world reached an intermediate peak on or about May 1st. Exceptions were strength in equity markets outside of North America and Europe, notably in Emerging markets. Last week, most equity markets around the world recovered from short term oversold levels.

Observations

Technical action by individual S&P 500 stocks remained bearish last week. Number of stocks breaking intermediate resistance totaled 73 while number of stocks breaking support totaled 22. The Up/Down ratio advanced last week to (208/200=) 1.04 from 0.92.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) moved higher last week. They are intermediate neutral. See charts near the end of this report

Medium term technical indicators in Canada also moved higher last week. They remain intermediate neutral. See charts near the end of this report.

Short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum) moved higher last week.

Short term technical indicators for Canadian markets and sectors also moved higher last week.

Short term political concerns in the U.S. remain elevated. Issues include tariff wars between the U.S., Mexico and China and anti-Trump hearings initiated by the Democrat controlled House of Representatives. Release of the Mueller report continues to elevate political rhetoric.

Frequency of S&P 500 and TSX Composite first quarter earnings reports continue to wind down. Only two S&P 500 companies are scheduled to report this week.

Forecasts for S&P 500 sales and earnings moved slightly lower again last week. Strength in the U.S. Dollar Index continues to take its toll. According to FactSet, second quarter earnings are expected to drop 2.1% on a year-over-year basis (versus 2.1% last week) and second quarter revenues are expected to increase 4.0% (versus 4.1% last week). Eighty six companies have issued negative second quarter guidance and 25 companies have issued positive guidance. Third quarter earnings are expected to increase 0.2% (versus 0.3% last week) and revenues are expected to increase 4.1% (versus 4.2% last week). Fourth quarter earnings are expected to increase 7.0% (versus 7.2% last week and fourth quarter revenues are expected to increase 4.5% (versus 4.6% last week. For all of 2019, earnings are expected to increase 3.1% (versus 3.2% last week and revenues are expected to increase 4.5% (versus 4.6% last week). First quarter 2020 earnings are expected to increase 10.5% and revenues are expected to increase 6.2%. Second quarter earnings are expected to increase 12.9% and revenue are expected to increase 6.8%.

Economic News This Week

Canadian May Housing Starts to be released at 8:15 AM EDT on Monday is expected to drop to 200,000 units from 235,500 units in April.

May Producer Price Index to be released at 8:30 AM EDT on Tuesday is expected to increase 0.1% versus a gain of 0.2% in April. Excluding food and energy, May Producer Price Index is expected to increase 0.2% versus a gain of 0.1% in April.

May Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.1% versus a gain of 0.3% in April. Excluding food and energy, May Consumer Price Index is expected to increase 0.2% versus a gain of 0.1% in April.

Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 217,000 from 218,000 last week

May Retail Sales to be released at 8:30 AM EDT on Friday are expected to increase 0.6% versus a decline of 0.2% in April. Excluding auto sales, May Retail Sales are expected to increase 0.4% versus a gain of 0.1% in April.

May Capacity Utilization to be released at 9:15 AM EDT on Friday is expected to increase to 78.0% from 77.9% in April. May Industrial Production is expected to increase 0.2 versus a decline of 0.5% in April.

April Business Inventories to be released at 10:00 AM EDT on Friday are expected to increase 0.5% versus no change in May.

June Michigan Consumer Sentiment Index to be released at 10:00 AM EDT on Friday is expected to dip to 98.0 from 100.00 in May.

Selected Earnings News This Week

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for June 7th 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for June 7th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for June 7th 2019

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

StockTwits released on Friday @EquityClock

Technical action by S&P 500 stocks to 10:00: Bullish. Intermediate breakouts: $HAS $DFS $WLTW $PLD $BSX $ROP $AON $ADP $FISV $MSFT $VRSN $EXL $PG $EW $XRAY. No breakdowns.

Procter & Gamble $PG, a Dow Jones Industrial stock moved above $108.68 to an all-time high extending an intermediate uptrend

Consumer Staples SPDRs $XLP moved above $58.26 to an all-time high extending an intermediate uptrend.

Canadian Pacific Railway $CP.CA, a TSX 60 stock moved above $309.50 to an all-time high extending an intermediate uptrend.

Microsoft $MSFT, a Dow Jones Industrial stock moved above $130.89 to an all-time high extending an intermediate uptrend.

Healthcare SPDRs $XLV moved above $90.85 setting an intermediate uptrend.

Shaw Communications $SJR $SJR.B.CA, a TSX 60 stock moved above $20.92 U.S. extending an intermediate uptrend.

U.S. Dollar Index ETN $UUP moved below intermediate support at $26.07. Major reason for strength in U.S. equity markets today.

Non-farm #Payrolls actually higher by 0.5% (NSA), or 687,000, weaker than the average increase for May of 0.7%. $MACRO #Employment #NFP

Keith Richard's Blog

Keith says, "Enough to make your head spin". Following is a link:

https://www.valuetrend.ca/enough-to-make-your-head-spin/

Hap Sneddon on BNNBloomberg's Market Call Tonight

Links to Friday's program:

Market Overview

https://www.bnnbloomberg.ca/video/hap-sneddon-s-market-outlook~1702779

Past Picks

https://www.bnnbloomberg.ca/video/hap-sneddon-s-past-picks~1702817

Top Picks

https://www.bnnbloomberg.ca/video/hap-sneddon-s-top-picks~1702837

Michael Campbell's Special Report

Last week, Michael released a special free report entitled, "Investment Opportunities and Pitfall for the rest of 2019". Don Vialoux was one of the participants in the report. The report has been well received. Following is a link to the report:

https://mikesmoneytalks.ca/services/moneytalks-free-service/

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average increased 4.41 to 54.71 on Friday. It remains intermediate neutral.

Bullish Percent Index for S&P 500 stocks increased 2.40 to 57.20 on Friday. It remains intermediate neutral.

TSX Momentum Barometer

Percent of TSX stocks trading above their 50 day moving average increased 0.84 to 48.74 on Friday. It remains intermediate neutral.

Bullish Percent Index for TSX stocks were unchanged at 57.85 on Friday. It remains intermediate neutral.

Disclaimer: Seasonality 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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