Tech Talk for Monday May 5th 2025

U.S. equity index futures were lower this morning. S&P 500 futures were down 45 points at 8:30 AM EDT.

Crude oil dropped $0.74 to $57.55 per barrel after OPEC announced plans to increase production.

Netflix dropped $52.69 to $1,103.80 after President Trump announced plans to place a tariff on films produced outside of the United States.

Berkshire Hathaway dropped $12.30 to $527.50 after Warren Buffet confirmed his intention to retire at the end of the year.

Freshpet dropped $0.74 to $57.55 after offering lower guidance.

EquityClock's Market Outlook for May 5th

Everything outside of the US is breaking out as equity investors rotate to other countries around the globe with greater certainty. See:

https://equityclock.com/2025/05/02/stock-market-outlook-for-may-5-2025/

The Bottom Line

Sell in May and go away? History of the Dow Jones Industrial Average during Post Presidential Election Years since 1950 (e.g. 2025) shows a shallow period of weakness from mid-May to the end of September (including a brief summer rally to the end of July). Average drop during the period was 2.0%.

Strength during the mid-March to mid-May period depended on:

? Anticipation of encouraging corporate news released at annual meetings normally held following release of first quarter results. CEO's love to offer good news during shareholder meetings.

? Economic growth that normally recovers during the Spring season (including a recovery in economic activity related to the Easter season).

What about this year? Conditions have been exaggerated this year due to President Trump's moves on tariffs. Major U.S. listed companies are reporting significantly higher than consensus first quarter revenues and earnings partially because consumers are buying extra goods (e.g discretionary goods such as.autos) prior to implementation of tariffs. Accordingly, first quarter results released to date by major listed companies have been substantially higher then consensus. Analysts have responded by raising consensus for S&P 500 first quarter earnings.. However, many companies also have issued warnings about dropping revenue and earnings gains beyond the first quarter. Analysts have responded by lowering revenue and earnings estimates for the remainder of 2025.

How have equity prices responded to these events? U.S. equity indices have recorded strong gains since the second week in April. Short term (20 days) momentum index for S&P 500 stocks advanced from 2.00% on April 7th to 86.60 % on Friday, a level that is significantly overbought and not sustainable. The stage for a short term correction in U.S. equity indices (i.e. return to the mean) has been set. Technical evidence for a start of the correction as of Friday has yet to appear.

Consensus for Earnings and Revenues for S&P 500 companies

Source: www.factset.com

Analyst estimates for earnings gains for the first quarter of 2025 increased substantially again last week after reported results significantly exceeded consensus: 72% of S&P 500 companies have reported to date. Consensus for first quarter earnings now calls for a 12.8% increase on a year-over-year basis, up from 10.1% last week. Consensus for first quarter revenues growth increased to 4.8% from 4.6%.

Analyst estimates for 2025 beyond the first quarter once were reduced significantly again. Analysts are responding to frequent company comments that "Although first quarter results were better than expected, we are cautious about future quarters". Consensus for second quarter earnings gains dropped to 5.7% from 6.4% last week. Consensus for second quarter revenue gains remained at 4.0%. Consensus for third quarter earnings gains dropped to 7.8% from 8.8% last week. Consensus for third quarter revenue growth dropped to 4.7% from 4.8%. Consensus for fourth quarter earnings gains dropped to 7.1% from 8.3% last week. Consensus for fourth quarter revenue gains increased to 5.3% from 5.0%.

For all of 2025, earnings are expected to increase 9.5%, down from 9.7% last week. Consensus for revenue gains remained at 5.0%.

For all of 2026, earnings are expected to increase 11.1%, down from 13.8% last week. Consensus for revenue gains was unchanged at 6.3%,

Economic News This Week

April ISM Non-manufacturing PMI released at 10:00 AM EDT on Monday is expected to slip to 50.6 from 50.8 in March

March U.S. Trade Deficit released at 8:30 AM EDT on Tuesday is expected to increase to $124.70 billion from $122.70 billion in February.

March Canadian Trade Deficit released at 8:30 AM EDT on Tuesday is expected to increase to $1.70 billion from 1.52 billion in February.

FOMC Interest Rate Decision is released at 2:00 PM EDT on Wednesday Consensus calls for no change in the Fed Fund Rate at 4.50%. Press conference is offered at 2:30 PM EDT.

First quarter Non-farm Productivity released at 8:30 AM EDT on Thursday is expected to drop 0.4% versus a 1.5% gain in the fourth quarter.

March Wholesale Inventories released at 10:00 AM EDT on Thursday are expected to increase 0.5% versus a 0.5% gain in February.

Canada's April Employment released at 8:30 AM EDT on Friday is expected to increase 24,500 versus a 32,600 drop in March. April Unemployment Rate is expected to remain unchanged from March at 6.7%.

Selected Earnings News This Week

Another 92 S&P 500 companies are scheduled to report this week (including one Dow Jones Industrial Average stock: Disney). Twelve TSX 60 companies are scheduled to report.

MONDAY: Berkshire Hathaway, Palantir, Cummins, Ford, ON Technology, Mattel, Baytex

TUESDAY: AMD, Duke Energy, Marriott, Suncor, Electronic Arts, Datadog, Kinross Gold, Super Micro Computer, Mosaic

WEDNESDAY: Uber, Walt Disney, ARM, Door Dash, Emerson Electric, Manulife Financial, Nutrien, Fortis, CF Industries.

THURSDAY: Toyota, Anheuser Busch, Shopify, ConocoPhillips, McKesson, Brookfield, Canadian Natural Resources, Sun Life Financial. Restaurant Brands International, Microchip Technology, Pembina Pipeline, BCE, Expedia, Molson Coors

FRIDAY: Enbridge, Telus, Onex, Algonquin Power

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for May 2nd 2025

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 2nd 2025

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for May 2nd 2025

Green: Increase from previous day

Red: Decrease from previous day

Changes last week

Links offered by valued providers

Mike's Money Talks for May 3rd

May 3 Episode – Michael Campbell’s Money Talks – Omny.fm

US Stock Market May Have Already Bottomed: Mark Leibovit

US Stock Market May Have Already Bottomed - HoweStreet

Sector Rotation + SPY Seasonality = Trouble for Bulls? Julius de Kempanear

https://www.youtube.com/watch?v=aIpgjygC3fM

What Does Mark Carney's Election Win Mean For Your Money? | In the Money with Amber Kanwar

https://www.youtube.com/watch?v=F0eDelGmmrA&t=293s

CHART THIS with David Keller, CMT Friday 5/2/25

https://www.youtube.com/watch?v=pblJ3IrIVYU

Technical Scoop For May 5th from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/library/

Technical Notes

All-time highs were set by iShares tracking equity indices outside of the U.S. included EAFE iShares (EFA), Eurozone iShares (EZU), Europe iShares (IEV), South Africa iShares (EZA) and Canada iShares (EWC)

Aerospace & Defense ETFs that broke to all-time highs included ITA and PPA

S&P 100 and NASDAQ 100 stock breakouts, extending intermediate uptrends, included Travelers, Berkshire Hathaway (BRK.B), Tesla (TSLA) Paychex (PAYX), Cintas (CTAS), DexCom (DXCM), Electronic Arts (EA) and NetEase (NTES). No breakdowns!

S&P 500 Momentum Barometers

The intermediate term Barometer jumped 15.40 to 56.40. It remains Neutral. Daily uptrend was extended.

The long term Barometer added 6.40 to 44.00. It changed from Oversold to Neutral on a move above 40.00.

TSX Momentum Barometers

The intermediate term Barometer added 5.05 to 59.63. It remains Neutral. Daily uptrend was extended.

The long term Barometer added 2.75 to 53.67. It remains Neutral. Daily uptrend was extended.

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.