Tech Talk for Monday November 25th 2019

U.S. equity index futures were higher this morning. S&P 500 futures were up 7 points in pre-opening trade. Index futures responded to news on U.S./China trade negotiations confirming that China plans to increase penalties on Chinese companies that steel intellectual property.

TDAmeritrade has agreed to its purchase by Schwab in an all-stock deal valued at $26 billion. Each TDAmeritrade will swap into 1.0837 Schwab shares. TDAmeritrade gained $0.97 to $49.10 and Schwab slipped $0.32 to $47.88.

Uber dropped $1.42 to $29.56 after London England revoked its operating licence.

Kirkland Gold (KL $63.32) has offered to acquire Detour Gold (DGC $22.21) in an all-stock deal valued at $4.89 billion. The offer is valued at $27.00 per share.

Tiffany gained $7.10 to $132.61 accepting a cash offer by LVMH to purchase the company at $135 per share. Value of the offer is $16.2 billion.

EquityClock's Daily Market Comment

http://www.equityclock.com/2019/11/22/stock-market-outlook-for-november-25-2019/

Note seasonality charts on the U.S. Dollar Index, Canadian Retail Sales and the Russell 2000 Index.

The Bottom Line

World equity markets eased slightly last week. Weakness was remarkable muted despite recent concerns including an earnings recession by major U.S. companies until the first quarter next year, growing efforts by the Democrats to impeach Donald Trump, continuing trade uncertainties between China and the U.S. and growing Middle East and Hong Kong tensions. Seasonal influences remain positive for most equity markets until the first week in January

Observations

Seasonal influences this year continue to follow their historic pattern. Seasonal influences on U.S. and Canadian equity markets turned positive in the second half of October. Seasonal influences for equity markets in other developed nations turned positive in early October.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) were virtually unchanged last week, but remain intermediate overbought.

Medium term technical indicators for Canadian equity markets also were virtually unchanged last week, but remain intermediate overbought.

Most short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) turned lower from overbought levels last week.

Short term technical indicators for Canadian markets and sectors also turned lower from overbought levels last week.

Third quarter corporate reports continue to wind down: Another 12 S&P 500 companies are scheduled to report this week. About 96% of S&P 500 companies have reported to date: Reports by major Canadian companies continue this week, but are past their peak. Consensus for S&P 500 companies now calls for a 2.2% drop in third quarter earnings (up from a drop of 2.3% last week) and a 3.1% increase in third quarter revenues.

An inflection point occurred last week for S&P 500 company earnings! Beyond third quarter results, analysts have started to increase earnings estimates for S&P 500 companies. According to FactSet, fourth quarter earnings are expected to decrease 1.4% and fourth quarter revenues are expected to increase 2.5%. For all of 2019, earnings are expected to increase 0.1% (up from unchanged last week) and revenues are expected to increase 3.8%. First quarter 2020 earnings are expected to increase 5.3% (up from 5.1%) and revenues are expected to increase 4.4 %. Second quarter 2020 earnings are expected to increase 6.7% (up from 6.4%) and revenues are expected to increase 4.9%. Earnings for all of 2020 are expected to increase 9.9% (up from 9.7%) and revenues are expected to increase 5.5%.

Annual MSCI Index rebalances are scheduled on Tuesday at the close. Expect U.S. equity volumes to be significantly higher than average.

Trading in U.S. equity markets closes at 1:00 PM EST on Wednesday November 27th and Friday November 29th

Economic News This Week

October New Home Sales to be released at 10:00 AM EST on Tuesday are expected to increase to 708,000 units from 701,000 units in September.

October Durable Goods Orders to be reported at 8:30 AM EST on Wednesday are expected to slip 0.5% versus a decline of 1.2% in September. Excluding Transportation Orders, October Durable Goods Orders are expected to increase 0.2% versus a decline of 0.4% in September.

Next estimate of U.S. Third Quarter GDP to be released at 8:30 AM EST on Wednesday is expected to remain unchanged from the first estimate at 1.9%.

Weekly Initial Jobless Claims to be released at 8:30 AM EST on Wednesday are expected to drop to 216,000 from 227,000 last week.

October Personal Spending to be released at 10:00 AM EST on Wednesday is expected to increase 0.3% versus a gain of 0.2% in September. October Personal Income is expected to increase 0.3% versus a gain of 0.3% in September.

Beige Book is released at 2:00 PM EST on Wednesday.

U.S. markets are closed on Thursday for the U.S. Thanksgiving holiday

Canadian September GDP to be released at 8:30 AM EST on Friday is expected to increase 0.2% versus a gain of 0.1% in August.

Earnings News This Week

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for November 22nd 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for November 22nd 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for November 22nd 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

Johnson & Johnson $JNJ, a Dow Jones Industrial stock moved above $137.49 resuming an intermediate uptrend.

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average dropped last week to 67.94 from 72.75. Percent remains intermediate overbought.

Bullish Percent Index for S&P 500 stocks was unchanged last week at 71.40. It remains intermediate overbought.

TSX Momentum Barometers

Percent of TSX stocks trading above their 50 day moving average slipped last week to 63.18 from 65.61. Percent remains intermediate overbought.

Bullish Percent Index for TSX stocks increased last week to 68.57 from 66.52. The Index remains intermediate overbought.

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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