Tech Talk for Monday October 23rd 2023
U.S. equity index futures were lower this morning. S&P 500 futures were down 16 points at 8:30 AM EDT.
Index futures responded to a six basis point increase in the yield by U.S. Treasuries to 5.00%.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0011-6.png "clip_image001[1]")
Hess added $0.96 to $163.98 after Chevron offered to buy the company for $53 billion cash. Each Hess share will convert into 1.025 shares of Chevron.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0021-8.png "clip_image002[1]")
Walgreens Boots added $0.69 to $21.95 after JP Morgan upgraded the stock from Neutral to Overweight.
Okta dropped $2.80 to $72.77 on news that a hacker has infiltrated its system.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0041-6.png "clip_image004[1]")
EquityClock's Daily Comment
Headline reads "Looking at a number of the coincident signals of economic activity, a recession does not seem like an imminent or obvious threat".
https://equityclock.com/2023/10/21/stock-market-outlook-for-october-23-2023/
The Bottom Line
Brutal equity markets around the world last week! Equity markets responded primarily to rising U.S. long term interest rates. Not surprising, the CNN Fear/Greed Index dropped to 26, a level that borders on the Extreme Fear level. See https://www.cnn.com/markets/fear-and-greed
Focus was on an increase in the yield of 10 year Treasuries and their related ETF: TBT
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Consensus earnings estimates for the third quarter of 2023 decreased last week. Consensus for the third quarter on a year-over-year basis is an earnings decrease of 0.4% (versus a previous increase of 0.4%). Third quarter revenues are expected to increase 1.8% (versus previous increase of 1.9%). Fourth quarter earnings are expected to increase 6.7% (versus previous increase of 7.6%) Fourth quarter revenues are expected to increase 3.9% (versus previous increase of 4.0%). For all of 2023, consensus calls for an earnings increase of 0.7% (versus previous 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 8.0 % (versus previous increase of 8.1%. and a revenue increase of 4.6% (versus previous increase of 4.7%). Consensus for the second quarter calls for an 11.7% earnings increase and a 5.3% revenue increase (versus a previous increase of 5.4%). 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
September U.S. New Home Sales released at 10.00 AM EDT on Wednesday are expected to drop to 679,000 from 675,000 in August.
Bank of Canada offers a policy statement at 10:00 AM EDT on Wednesday. Press conference is offered at 11:00 AM EDT. Consensus calls for no change in the Overnight Rate at 5.0%, but with warnings that another increase is possible if economic conditions remain strong.
Federal Reserve Chairman Powell is scheduled to comment at 4:35 PM EDT on Wednesday at a previously scheduled speech.
September Durable Goods Orders released at 8:30 AM EDT on Thursday are expected to increase 0.6% versus a 0.4% increase in August.
First estimate of U.S. Third Quarter Real GDP released at 8:30 AM EDT on Thursday is expected to record annualized growth at 4.1% rate versus a 2.1% rate in the second quarter.
September PCE Price Index released at 8:30 AM EDT on Friday is expected to increase 0.3% versus a gain of 0.4% in August. Excluding food and energy, September PCE Price Index is expected to increase 0.3% versus a gain of 0.1% in August. This data point is the most important "market moving" event this week
September Personal Income released a 10:00 AM EDT on Friday is expected to increase 0.4% versus a gain of 0.4% in August.
October Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to drop to 63.0 from 68.1 in September.
Selected Earnings News This Week
Source: www.Investing.com
Seventeen percent of S&P 500 companies have reported quarterly results to date. Another 160 companies are scheduled to report this week (including 12 Dow Jones Industrial Average companies. First Quantum Minerals, Agnico-Eagle, Canadian National Railway, Fortis, Shopify and Imperial Oil are the first TSX 60 companies to report.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Oct.20th 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 20th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for October 20th 2023
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued contributors
Mike's Money Talks for October 21st 2023
October 21st Episode (mikesmoneytalks.ca)
S&P 500 breaks below its 200 day moving average
How Mega-Cap Names Dominate Through Market Cap: Dave Keller
How Mega-Cap Names Dominate Through Market Cap | The Final Bar | StockCharts.com
RRG is Sending a Clear Message And Finds Two Stocks With Good Upside Potential
Negative Turn in Markets Due to Spike In Yields | The MEM Edge (10.20.23)
Negative Turn in Markets Due to Spike In Yields | The MEM Edge (10.20.23) - YouTube
FEAR is Building! VIX Challenges Key 20 Level | Trading Places (10.19.23)
FEAR is Building! VIX Challenges Key 20 Level | Trading Places (10.19.23) - YouTube
This is Why You Should Be Commodities Heavy Right Now | Your Daily Five (10.20.23)
This is Why You Should Be Commodities Heavy Right Now | Your Daily Five (10.20.23) - YouTube
Is it time to get bold with gold? Bob Hoye
Is it Time to Get Bold with Gold? - HoweStreet
October 19, 2023 | Venezuela A Wild Card Threat To Future Canadian Oil Exports: Josef Schachter
Venezuela A Wild Card Threat To Future Canadian Oil Exports - HoweStreet
October 19, 2023 | China Is Buying Lots of Gold: Mark Liebovit
China Is Buying Lots of Gold - HoweStreet
Oct 21, 2023: Trading Desk Notes for October 21st : Victor Adair
Trading Desk Notes For October 21, 2023 - HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.com
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
On Friday, the S&P 500 Index at 4,216.45 closed just below its 200 day moving average at 4,233.14 and just above the top of a previous trading range at 4,195.44. Will it hold?
The TSX Index is testing short term support at18,847.09. Will it hold?
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 10.80 last week to 15.40. The Barometer is deeply Oversold. It currently is testing its intermediate low set on October 5th at 8.60.
The long term Barometer dropped 6.60 last week to 32.80, a 12 month low. It remains Oversold, but its daily trend remains downward.
TSX Momentum Barometers
The intermediate term Barometer dropped 6.17 last week to 28.19. It remains Oversold. The Barometer's October 5th low at 11.89 is being tested.
The long term Barometer dropped 4.84 last week to 30.40. It remains Oversold. The October 5th low at 28.19 is being tested.
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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