Tech Talk for Monday October 16th 2023

The Bottom Line

Third quarter report season is "off to a good start". Reports released to date generally have recorded higher than consensus results (notably by the U.S. money center banks). Analysts were prompted to raise estimates. Revenue and earnings gains on a year-over-year basis are projected to accelerate in the fourth quarter. The stage is set for a recovery in North American equity markets until at least the beginning of 2024.

Consensus for Earnings and Revenues for S&P 500 Companies

Source: www.FactSet.com

Consensus earnings estimates for the third quarter of 2023 increased slightly last week. Consensus for the third quarter on a year-over-year basis is an earnings increase of 0.4% (versus previous decrease of 0.3%). Third quarter revenues are expected to increase 1.9% (versus previous increase of 1.7%). Fourth quarter earnings are expected to increase 7.6% (versus previous increase of 7.8%) Fourth quarter revenues are expected to increase 4.0% (versus previous increase of 3.9%). For all of 2023, consensus calls for an earnings increase of 0.9%. Revenues are expected to increase 2.4%.

The recovery continues into 2024, but at a slightly lower rate. Consensus for the first quarter on a year-over-year basis calls for an earnings increase of 8.1 % (versus previous increase of 8.2%. and a revenue increase of 4.7% (versus previous increase of 4.6%). Consensus for the second quarter calls for an 11.7% earnings increase (versus a previous increase of 11.8%) and a 5.4% revenue increase (versus a previous increase of 5.5%). Consensus for all of 2024 is an increase in earnings of 12.2% and a 5.6% increase in revenues (versus a previous increase of 5.5% last week).

Economic News This Week

Source: www.Investing.com

October Empire State Manufacturing Survey released at 8:30 AM EDT is expected to decline 1.50 versus a gain of 1.90 in September.

September Retail Sales released at 8:30 AM EDT on Tuesday are expected to increase 0.2% versus a gain of 0.6% in August. Excluding auto sales, September Retail Sales are expected to increase 0.1% versus a gain of 0.6% in August.

September Canadian Consumer Price Index is released at 8:30 AM EDT on Tuesday.

September U.S. Capacity Utilization released at 9:15 AM EDT on Tuesday is expected to slip from 79.7% to 79.6% September Industrial Production is expected to increase 0.1% versus a gain of 0.4% in August.

August U.S. Business Inventories released at 10:00 AM EDT on Tuesday are expected to increase 0.3% versus unchanged in July.

September Housing Starts released at 8:30 AM EDT on Wednesday are expected to increase to 1.404 million units from 1.283 million units in August.

October Philly Fed Index released at 8:30 AM EDT on Thursday is expected to decline 6.8 versus a decline of 13.5 in September.

September U.S. Existing Home Sales released at 10:00 AM EDT on Thursday are expected to drop to 3.94 million units from 4.04 million units in August.

September Leading Economic Indicators released at 10:00 AM EDT on Thursday are expected to drop 0.3% versus a drop of 0.4% in August.

Canadian August Retail Sales are released at 8:30 AM EDT on Friday.

Selected Earnings News This Week

Source: www.Investing.com

Six percent of S&P 500 companies have reported quarterly results to date. Another 55 companies are scheduled to report this week. No TSX 60 companies are scheduled to report.

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Oct.13th 2023

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 October 13th 2023

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for October 13th 2023

Green: Increase from previous day

Red: Decrease from previous day

Links offered by valued providers

Mike's Money Talks: October 14th

Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)

Gain GREATER CLARITY on The Market's Latest Moves With Seasonality Charts! | StockCharts In Focus

https://www.youtube.com/watch?v=NNFmtKgPVRE&t=135s

Markets Stall As Week Progresses – Here’s Why | The MEM Edge (10.13.23)

https://www.youtube.com/watch?v=0wkFF8z1dhM

Growth Sectors Tumble as Defensive Plays Post a Strong Finish | The Final Bar (10.13.23)

https://www.youtube.com/watch?v=kBrKQDRtQP8

Looking At A Perfect Pullback Opportunity | Moxie Indicator Minutes (10.13.23)

https://www.youtube.com/watch?v=rkGW0-3RdIM

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

JP Morgan $JPM a Dow Jones Industrial Average stock moved above intermediate resistance at $149.15. The stock responded to a better than consensus third quarter report.

Regeneron $REGN a NASDAQ 100 stock moved above $847.50 to an all-time high extending an intermediate uptrend.

Gilead $GILD a NASDAQ 100 stock moved above $77.73 completing a double bottom pattern.

Allstate $ALL an S&P 100 stock moved above $116.12 extending an intermediate uptrend.

ConocoPhillips an S&P 100 stock moved above $125.50 extending an intermediate uptrend.

IBM a Dow Jones Industrial Average stock moved below $139.76 and $139.61 completing a short term Head & Shoulders pattern.

FedEx $FDX an S&P 100 stock moved below $246.05 completing a double top pattern.

eBay $EBAY a NASDAQ 100 stock moved below $41.99 and $41.78 setting an intermediate downtrend.

Canadian Pacific CP.TO a TSX 60 stock moved below Cdn$98.11 setting an intermediate downtrend.

S&P 500 Momentum Barometers

The intermediate term Barometer dropped 1.20 on Friday, but added 8.80 last week to 26.20. It remains Oversold. A bottom was reached a week ago at 8.60.

The long term Barometer dropped 1.00 on Friday, but added 1.00 last week to 39.40. It remains Oversold. Early signs of a bottom have appeared.

TSX Momentum Barometers

The intermediate term Barometer added 4.41 on Friday and gained 16.22 last week to 34.36. It remains Oversold. The bottom was reached a week ago at 11.89.

The long term Barometer slipped 0.88 on Friday, but added 1.61 last week to 35.24. It remains Oversold. The bottom likely was reached a week ago at 28.19.

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