Tech Talk for Monday October 21st 2024

U.S. equity index futures were lower this morning. S&P 500 futures were down 16 points at 8:30 AM EDT.

People's Bank of China cut its prime lending rate on one and five year lending rates to major banks by 0.25%. The rate on one year loans dropped to 3.1% and the rate on five year loans dropped to 3.6%.

Boeing added $5.01 to $160.01 after reaching a tentative agreement with its machinist union. Compensation is expected to increase 35% over four years.

Spirit Airlines advanced $0.46 to $1.93 after reaching a deal to extend a key debt financing deadline.

Kenvue added $1.78 to $23.50 on news that activist investor Starboard Value has acquired a significant position in the company

Humana added $10.86 to $278.00 and Cigna dropped $12.31 to $212.69 following news reports on a merger negotiations.

EquityClock's Stock Market Outlook for October 21st

The trend of Industrial Production this year points to a Republican win for the office of the President. See:

https://equityclock.com/2024/10/19/stock-market-outlook-for-october-21-2024/

The Bottom Line

Better than consensus third quarter results released to date by 14% of S&P 500 companies prompted North American equity indices to advance to all-time highs. Analysts were less convinced. They lowered third quarter consensus earnings estimates again.

Frequency of reports ramps up this week. Another 112 S&P 500 companies (including seven Dow Jones Industrial Average companies) are scheduled to report. Focuses are on reports by Amazon on Tuesday, Tesla on Wednesday and Amazon on Thursday.

Focus in Canada is on the Bank of Canada's statement on interest rates on Wednesday Consensus calls for at least a 0.25% drop in the Bank's lending rate for major Canadian chartered banks.

Consensus for Earnings and Revenues by S&P 500 companies

Source: www.factset.com

Earnings estimates for remainder of 2024 and for the first half of 2025 were lowered slightly again last week despite encouraging third quarter results release to date. Fourteen percent of S&P 500 companies have reported to date: 79% reported higher than consensus earnings and 64% reported higher than consensus revenues.

A word of caution! Consensus for third quarter results calls for significantly lower than the 11.3% year-over-year earnings gain recorded in the second quarter. Third quarter earnings on a year-over-year basis are expected to slip to a 3.4% increase, down from 4.1% last week. Consensus for third quarter revenues calls for a 4.7% year-over-year increase (versus a 4.6% increase last week).

Earnings and revenue gains accelerate in the fourth quarter, but at a slightly lower rate. Consensus calls for a 14.0% increase in earnings (versus a 14.2% increase last week) and a 5.0% revenue increase.

For all of 2024, consensus calls for a 9.4% earnings increase (versus a 9.7% increase last week) and 5.0% revenue increase.

Earnings gains accelerate in 2025, but at a slightly lower rate. First quarter earnings are expected to increase 13.8 % on a year-over-year basis (versus a 13.9% increase last week) and revenues are expected to increase 5.5%. Second quarter earnings are expected to increase 13.0% (versus a 13.1% gain last week) and revenues are expected to increase 5.4%. For all of 2025 earnings are expected to increase 15.1% (versus a 14.9% increase last week) and revenues are expected to increase 5.9%.

Economic News This Week

September U.S. Leading Economic Indicators released at 10:00 AM EDT on Monday are expected to drop 0.3% versus a gain of 0.2% in August.

Bank of Canada statement on interest rates is released at 9:45 AM EDT on Wednesday. A press conference is offered at 10:30 AM EDT.

September U.S. Existing Home Sales released at 10:00 AM EDT on Wednesday are expected to increase to 3.90 million units from 3.86 million units in August

Beige Book is released at 2:00 AM EDT on Wednesday

September New Home Sales released at 10:00 AM EDT on Thursday are expected to drop to 710,000 from 716,000 in August.

September U.S. Durable Goods Orders released at 8:30 AM EDT on Friday are expected to drop 0.9% versus unchanged in August.

October Michigan Consumer Sentiment released at10:00 AM EDT on Friday is expected to slip to 68.9 from 70.1.

Selected Earnings News This Week

Trader's Corner

Note that data was updated from October 10th

Equity Indices and Related ETFs

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 18th 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for October 18th 2024

Green: Increase from previous day

Red: Decrease from previous day

Changes Last Week

Links offered by valued providers

Michael Campbell's Money Talks for October 19th

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

Just a Handful of Stocks Boosting Dow Higher: Mark Leibovit

Just a Handful of Stocks Boosting Dow Higher - HoweStreet

Ross Clark, Martin Armstrong, Hilliard MacBeth interviews

https://www.howestreet.com/category/talk-digital-network/radio-podcasts/this-week-in-money/

Be On The Lookout For THIS During Earnings Season! Mary Ellen McGonagle

https://www.youtube.com/watch?v=E5THqEtyJcI

Weekly Update with Larry Berman – October 19, 2024

https://www.youtube.com/watch?v=6oSxjK2CByE

CHART THIS with David Keller, CMT Friday 10/18/24

https://www.youtube.com/watch?v=Dmn8Uo8RRP8&t=28s

Insurers Stung By Florida Hurricanes: Bob Hoye

Insurers Stung By Florida Hurricanes - HoweStreet

Stats Show Higher Unemployment After Fed Rate Cuts: Danielle Park

Stats Show Higher Unemployment After Fed Rate Cuts - HoweStreet

Technical Scoop from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/library/

S&P 500 Momentum Barometers

The intermediate term Barometer added 0.40 last week to 77.20. It remains Overbought.

The long term Barometer added 2.00 last week to 79.60. It remains Overbought.

TSX Momentum Barometers

The intermediate term Barometer dropped 1.69 to 80.27 last week. It remains Overbought.

The long term Barometer slipped 0.90 to 80.27 last week. 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