Tech Talk for Monday May 1st 2023
U.S. equity index futures were lower this morning. S&P 500 futures were down 4 points at 8:30 AM EDT.
Volume on North American exchanges is expected to be well below average today. Equity markets outside on North America are closed for a variety of national holidays.
JP Morgan added $5.14 to $143.38 after announcing purchase of First Republic Bank's assets.
Enbridge (ENB.TO Price: Cdn$53.87) is expected to open higher after announcing purchase of Aitken Creek Gas Storage for Cdn$400 million.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/05/clip_image0021.png "clip_image002[1]")
Scotts Miracle Grow added $1.08 to $67.89 after Stifel Nicolaus upgraded the stock from Hold to Buy.
Match slipped $0.10 to $36.81 after KeyBanc Capital lowered its target price from $75 to $60.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/05/clip_image0041.png "clip_image004[1]")
EquityClock's Daily Comment
Headline reads "S&P 500 Index has gained an average of 0.4% in the month of May with 75% of periods closing higher".
http://www.equityclock.com/2023/04/29/stock-market-outlook-for-may-1-2023/
Technical Scoop for May 1st offered by David Chapman and www.EnrichedInvesting.com
The Bottom Line
Focuses this week are on FOMC's decisions on monetary policy released on Wednesday. Consensus calls for a 0.25% increase in the Fed Fund Rate to 5.00%-5.25%. Of greater importance is guidance offered on the Committee on future changes to the Rate. The latest economic data point, March core PCE Price Index released on Friday, was "less friendly" to an early reduction in the Fed Fund Rate in 2023. The FOMC likely will "peg" the Fed Fund Rate at the higher rate and will caution that a lowering of the rate is unlikely to occur any time soon.
Responses by the S&P 500 Index and NASDAQ 100 Index to first quarter reports released to date have been a pleasant surprise thanks mainly to higher than consensus results released by key "big cap" S&P 500 companies. .Notable companies reporting "blow out" earnings included McDonalds, Meta Platforms, Microsoft and ExxonMobil. Analysts responded by raising their 2023 estimates. Unfortunately, the majority of remaining reporting companies reported in line or less than consensus results. The equally weighted S&P 500 ETF gained only 0.15% versus a gain of 0.87% for the S&P 500 Index. Excluding "big cap" stocks, the equally weighted S&P 500 Index was slightly lower during the week.
Seasonal influences for U.S. equity indices have a history of reaching an intermediate peak shortly after the end of the first quarter report season. On average during the past 20 years, the S&P 500 Index passed its seasonal high on or about May 2nd.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.Factset.com
Better than expected first quarter reports released last week by "big cap" companies prompted analysts to increase their first quarter earnings and revenue estimates again: Fifty three percent of S&P 500 companies have reported to date: 79% reported higher than consensus earnings per share and 74% reported higher than consensus revenues. Consensus calls for a year-over-year drop in first quarter earnings of 3.7% (down from a drop of 6.2% last week) and an increase in first quarter revenues of 2.9% (up from a gain of 2.1% last week).
Estimates for the remainder of the year increased slightly .Consensus for the second quarter calls for a drop of 5.0% in earnings and a drop of 0.1% in revenues (both unchanged from last week). Consensus for third quarter earnings calls for a 1.7% increase in earnings (up from 1.5% last week) and a 1.4% increase in revenues (unchanged from last week). Consensus for the fourth quarter calls for an 8.8% increase in earnings (up from 8.5% last week) and a 3.6% increase in revenues (down from 3.7% last week). For all of 2023, consensus calls for an increase of 1.2% in earnings (up from 0.8% last week) and a 2.2% increase in revenues (up from 2.1% last week)
Economic News This Week
Source: www.Investing.com
March Construction Spending released at 10:00 AM EDT on Monday is expected to increase 0.1% versus a drop of 0.1% in February.
April ISM Manufacturing PMI released at 10:00 AM EDT on Monday is expected to improve to 46.8 from 46.3 in March.
March Factory Orders released at 10:00 AM EDT on Tuesday are expected to increase 1.5% versus a decline of 0.7% in February.
April ISM Non-manufacturing PMI released at 10:00 AM EDT on Wednesday is expected to improve to 51.7 from 51.2 in March.
FOMC announcement on interest rates is released at 2:00 PM EDT on Wednesday. Consensus calls for another 0.25% increase in the Fed Fund Rate to 5.00%-5.25%.
March U.S. Trade Deficit released at 8:30 AM EDT on Thursday is expected to recover to $63.80 billion from $70.05 billion in February.
March Canadian Merchandise Trade released at 8:30 AM EDT on Thursday is expected to improve to a surplus of $1.80 billion from a surplus of $0.42 billion in February.
April Non-farm Payrolls released at 8:30 AM EDT on Friday is expected to drop to 178,000 from 231,000 in March. April Unemployment Rate is expected to increase to 3.6% from 3.5% in March. April Hourly Earnings are expected to increase 0.3% versus a gain of 0.3% in March. On a year-over-year basis, April Hourly Earnings are expected to increase to 4.3% from 4.2% in March.
Canadian March Employment is released at 8:30 AM EDT on Friday. Employment increased
34,700 in February. March Unemployment Rate is expected to remain unchanged from February at 5.0%.
Selected Earnings News This Week
Source: www.Investing.com
Another 162 S&P 500 companies (and one Dow Jones Industrial company: Pfizer) are scheduled to release quarterly results this week.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for April 28th 2023
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for April 28th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for April 28th 2023
Green: Increase from previous day
Red: Decrease from previous day
Source for positive seasonal ratings: www.equityclock.com
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 Chart of the Day
Technical score for Invesco QQQ units is 4
? Intermediate uptrend confirmed on a move above $321.63. Score: 2
? Strength relative to the S&P 500 Index: Neutral .Score: 0
? Trades above its 20 day moving average. Score: +1
? Daily momentum indicators (Stochastics, RSI, MACD) turned higher: Score increased from -1 to +1
Technical Notes for Friday
Invesco NASDAQ 100 ETF $QQQ moved above $321.63 extending an intermediate uptrend.
Strength was led with a move by Micron above intermediate resistance.
United Kingdom iShares $EWU moved above $33.95 to an all-time high extending an intermediate uptrend.
Comcast $CMCSA an S&P 100 stock moved above $40.84 extending an intermediate uptrend.
Colgate $CL an S&P 100 stock moved above $79.45 extending an intermediate uptrend.
ExxonMobil $XOM moved above $118.72 to an all-time high extending an intermediate uptrend.
Links offered by valued providers
April 27, 2023 | US Economy Worse Than Government Indicates: Mark Leibovit
US Economy Worse Than Government Indicates - HoweStreet
Hello Copper: A podcast by Sprott
Mike's Money Talks for April 29th
Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)
Six-Month Period of UNfavorable Seasonality Begins Next Week
Carl Swenlin | April 28, 2023 at 05:07 PM
Six-Month Period of UNfavorable Seasonality Begins Next Week | DecisionPoint | StockCharts.com
CMT Symposium: Legends of Technical Analysis | David Keller, CMT | The Final Bar (04.28.23)
ChartChat with Grayson Roze and Greg Schnell, Part Two | StockCharts TV - YouTube
Are stocks ready to run? Bruce Fraser April 28th 2023
Are Stocks Ready to Run? | Bruce Fraser | Power Charting (04.28.23) – YouTube
Bob Hoye: April 27, 2023 | Gold, US Dollar, S&P 500, EV's
Gold, US Dollar, S&P 500, EV's - HoweStreet
Victor Adair: Apr 29, 2023: Trading Desk Notes For April 29, 2023
Trading Desk Notes For April 29, 2023 - HoweStreet
Are Stocks Ready to Run? | Bruce Fraser | Power Charting (04.28.23)
https://www.youtube.com/watch?v=cqb8nL_kPvQ
S&P 500 Regains Its Uptrend | Mary Ellen McGonagle | The MEM Edge (04.28.23)
https://www.youtube.com/watch?v=drhVXwV21us
Links offered by Mark Bunting and www.uncommonsenseinvestor.com
Essential Principles of Finding 100-Bagger Stocks – Uncommon Sense Investor
The Case Against Gold – Uncommon Sense Investor
Glittering Franco-Nevada Outperformance Will Continue – Uncommon Sense Investor
S&P 500 Momentum Barometers
The intermediate term Barometer advanced 7.00 on Friday and 1.40 last week to 58.20. It remains Neutral.
The long term Barometer gained 5.20 on Friday, but slipped 0.80 to 58.60 last week. It remains Neutral.
TSX Momentum Barometers
The intermediate term Barometer added 4.31 on Friday, but slipped 1.30 last week to 64.22. It remains Overbought.
The long term Barometer added 2.16 on Friday, but slipped 2.59 last week to 62.07. 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
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