Tech Talk for Monday May 8th 2023
U.S. equity index futures were higher this morning. S&P500 futures were up 10 points at 8:30 AM EDT.
Scotts Miracle Grow added $2.45 to $68.89 after JP Morgan upgraded the stock from Neutral to Overweight.
Tyson Foods dropped $4.40 to $56.29 after reporting an adjusted loss in its fiscal second quarter.
Alcoa advanced $0.89 to $36.99 after JP Morgan initiated coverage with an Overweight rating.
Snowflake gained $5.68 to $159.85 after Stifel Nicolaus upgraded the stock from Hold to Buy.
EquityClock's Daily Comment
While full-time hiring in Canada is still upbeat, employers are showing reluctance switching part-time employees over to full-time ahead of the typically busy summer season.
http://www.equityclock.com/2023/05/06/stock-market-outlook-for-may-8-2023/
The Bottom Line
Sell in May and Go Away? Not exactly! The expression is based on expectations that U.S. equity markets peak in the first week in May and bottom at the end of October. The expression is partially true: Most of the gains by the S&P 500 and Dow Jones Industrial Average since 1950 have been realized from November to May: Relative small positive returns and, more important, higher variable returns are realized from May to November, a period known for its greater than average volatility and lower than average volume. Despite lower performance by broadly based U.S. equity indices during the May to November period, seasonal investment opportunities in U.S sectors and individual equities exist including investments in precious metals, biotech and selected utilities and consumer staples industries. In addition, long term U.S. government bonds have recorded favourable seasonal returns from May 8th to August 28th.
Seasonal influences by the S&P 500 Index and Dow Jones Industrial Average have varied slightly during the past 20 years relative to their history since 1950: The seasonal peak for the Dow Jones Industrial Average has occurred on May 2nd and its seasonal low has occurred on September 20th.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.Factset.com
Better than expected first quarter reports released last week by Apple, largest weight stock in the S&P 500 Index, prompted analysts to increase their first quarter earnings and revenue estimates again: Eighty five percent of S&P 500 companies have reported to date: 79% have reported higher than consensus earnings per share and 75% have reported higher than consensus revenues. Consensus calls for a year-over-year drop in first quarter earnings of 2.2% (down from a drop of 3.7% last week) and an increase in first quarter revenues of 3.9% (up from a gain of 2.9% last week).
Earnings estimates for the remainder of the year eased slightly .Consensus for the second quarter calls for a drop of 5.7% in earnings (versus a drop of 5.0% last week) and a drop of 0.1% in revenues (unchanged from last week). Consensus for third quarter earnings calls for a 1.2% increase in earnings (down from 1.7% last week) and a 1.5% increase in revenues (up from 1.4%last week). Consensus for the fourth quarter calls for an 8.5% increase in earnings (down from 8.8% last week) and a 3.7% increase in revenues (up from 3.6% last week). For all of 2023, consensus calls for an increase of 1.2% in earnings (unchanged from last week) and a 2.4% increase in revenues (up from 2.2% last week).
Economic News This Week
Source: www.investing.com
U.S. April Consumer Price Index released at 8:30 AM EDT on Wednesday is expected to increase 0.4% versus a gain of 0.1% in March. On a year-over-year basis, April CPI is expected to increase 5.0% versus a gain of 5.0% in March. Excluding food and energy, April Consumer Price Index is expected to increase 0.4% versus a gain of 0.4% in March. On a year-over-year basis, core April CPI is expected to increase 5.5% versus a gain of 5.6% in March.
U.S. April Producer Price Index released at 8:30 AM EDT on Thursday is expected to increase 0.3 versus a decline of 0.5% in March. On a year-over-year basis, April PPI is expected to increase 2.5% versus a gain of 2.7% in March. Excluding food and energy, core April PPI is expected to increase 0.2% versus a decline of 0.1% in March. On a year-over-year basis, core April PPI is expected to increase 3.3% versus a gain of 3.4% in March.
May Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to slip to 63.0 from 63.5 in April.
Earnings News This Week
Source: www.investing.com
Another 32 S&P 500 companies (including one Dow Jones Industrial Average company: Disney) are scheduled to release quarterly results this week. Another 6 TSX 60 companies are scheduled.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 5th 2023
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for May 5th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 5th 2023
Green: Increase from previous day
Red: Decrease from previous day
Source for positive seasonal ratings: www.equityclock.com
Chart of the Day
Berkshire Hathaway recently has been a buyer of selected Japanese equities. The Nikkei Average has been the strongest equity index of major world equity indices during the past two months:
? Intermediate trend is up. The Average just broke to a 16 month high on Friday. Score: 2
? Strength relative to the S&P 500 Index is Positive. Score: 2
? The Average trades above its 20 day moving average. Score: 1
? Daily momentum indicators (Stochastics, RSI, MACD) are trending higher. Score: 1
? Technical score is 2+2+1+1= 6
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
Oracle $ORCL an S&P 100 stock moved above $96.74 extending an intermediate uptrend.
Open Text $OTEX a TSX 60 stock moved above US$39.75 extending an intermediate uptrend. The company reported higher than consensus fiscal third quarter results.
Links offered by valued providers
Is This Market Resilient Or What? Greg Schnell May 05, 2023 at 09:42 AM
Is This Market Resilient Or What? | The Canadian Technician | StockCharts.com
U.S Debt ceiling, the Fed, Gold, Cryptos, Marijuana, Mark Leibovit May 04
https://www.howestreet.com/2023/05/us-debt-ceiling-the-fed-gold-cryptos-marijuana-mark-leibovit/
Mike's Money Talks for May 6th
Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)
Stocks Power Higher Driven By AAPL, Energy | Dave Keller, CMT | (05.05.23)
Stocks Power Higher Driven By AAPL, Energy | Dave Keller, CMT | (05.05.23) - YouTube
5 Uptrends At The Top of My List | Larry Tentarelli | Your Daily Five (05.05.23)
5 Uptrends At The Top of My List | Larry Tentarelli | Your Daily Five (05.05.23) - YouTube
May 5, 2023 | The Fed Doesn't Set Trends, It Follows Them: Bob Hoye
The Fed Doesn't Set Trends, It Follows Them - HoweStreet
Trading Desk Notes For May 6, 2023 Victor Adair
Trading Desk Notes For May 6, 2023 - HoweStreet
Link from Mark Bunting and www.uncommonsenseinvestor.com
Davis Rea Conference Call
Technical Scoop from David Chapman and www.EnrichedInvesting.com
S&P 500 Momentum Barometers
The intermediate term Barometer added 9.60 on Friday, but dropped 5.40 last week to 52.80. It remains Neutral.
The long term Barometer added 4.60 on Friday, but dropped 6.60 last week to 52.00. It remains Neutral.
TSX Momentum Barometers
The intermediate term Barometer added 8.62 to 55.60, but dropped 2.60 last week. It remains Neutral.
The long term Barometer added 3.88 on Friday, but dropped 0.84 last week. 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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