Tech Talk for Monday October 30th 2023
U.S. equity index futures were higher this morning. S&P 500 futures were up 24 points at 8:30 AM EDT.
McDonald's gained $5.79 to $261.55 after reporting higher than consensus third quarter results.
Krispy Kreme slipped $0.18 to $12.68 after Truist downgraded the stock from Buy to Hold.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0021-13.png "clip_image002[1]")
Newell Brands dropped $0.06 to $6.60 after Truist and JP Morgan downgraded the stock.
Air Canada is expected to open higher after offering positive fourth quarter revenue guidance.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0041-11.png "clip_image004[1]")
EquityClock's Daily Comment
Headline reads "Bonds and commodities are showing the first signs of sustained outperformance versus stocks this year, providing a place of refuge in this market selloff".
https://equityclock.com/2023/10/28/stock-market-outlook-for-october-30-2023/
The Bottom Line
According to www.EquityClock.com "October 27th marks the average start to the best six months of the year for stocks. Over the past five decades, the S&P 500 Index has gained an average of 8.12% between October 27th and May 5th." In addition, the strongest nine day period in the year for the S&P 500 Index during the past 73 years according to StochChart's Tom Bowley has been from the close on October 27th to the close on November 8th.
Focus this week is on the FOMC decision on U.S. interest rates released at 2:00 PM EDT on Wednesday. Consensus calls for no change in the Fed Fund Rate at 5.25%-5.50% with a warning that the rate could move higher in inflation pressures escalate.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Consensus earnings estimates for the third quarter of 2023 increased substantially last week. Consensus for the third quarter on a year-over-year basis is an earnings increase of 2.7% (versus a previous decrease of 0.4%). Third quarter revenues are expected to increase 3.8% (versus previous increase of 1.8%). Fourth quarter earnings are expected to increase 5.3% (versus previous increase of 6.7%) Fourth quarter revenues are expected to increase 3.8% (versus previous increase of 3.9%). For all of 2023, consensus calls for an earnings increase of 0.9% (versus previous increase of 0.7%). 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 7.6 % (versus previous increase of 8.0%. and a revenue increase of 4.5% (versus previous increase of 4.6%). Consensus for the second quarter calls for an 11.2% earnings increase (versus previous increase of 11.7%) and a 5.3% revenue increase. Consensus for all of 2024 is an increase in earnings of 11.9% (versus previous 12.2%) and a 5.5% increase in revenues (versus a previous increase of 5.6% last week).
Economic News This Week
August Canadian GDP released at 8:30 AM EDT on Tuesday is expected to increase 0.1% versus no change in July.
October ISM Manufacturing Index released at 10:00 AM EDT on Wednesday is expected to remain unchanged at 49.0 from September.
September Construction Spending released at 10:00 AM EDT on Wednesday is expected to increase 0.4% versus a gain of 0.5% in August.
FOMC update on U.S. interest rates is released at 2:00 PM EDT on Wednesday. Consensus calls for no change in the Fed Fund Rate. Current target rate is 5.25%-5.50%.
September Factory Orders released at 10:00 AM EDT on Thursday are expected to increase 1.0% versus a gain of 1.2% in August
October Non-farm Payrolls released at 8:30 AM EDT on Friday are expected to drop to 172,000 from 336,000 in September. October Unemployment Rate is expected to remain unchanged from September at 3.8%. October Average Hourly Earnings are expected to increase 0.3% versus a gain of 0.2% in September.
October Canadian Employment Change is released at 8:30 AM EDT on Friday. October Unemployment Rate
October Non-manufacturing ISM PMI is released at 10:00 AM EDT on Friday.
Selected Earnings News This Week
49% of S&P 500 companies have reported quarterly results to date. Another 162 S&P 500 companies are scheduled to report this week (including four Dow Jones Industrial Average companies. Another 12 TSX 60 companies are scheduled to report.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Oct.27th 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 27th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for October 27th 2023
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
Links offered by valued providers
Mike's Money Talk for October 28th
October 28th Episode (mikesmoneytalks.ca)
Will the Plunge Protection Team boost stock markets? Mark Leibovit
Will the Plunge Protection Team Boost Stock Markets? - HoweStreet
Are golden opportunities coming? Bob Hoye
Are Golden Opportunities Coming? - HoweStreet
Market’s At RISK in The Mega Cap Bloodbath! | Moxie Indicator Minutes (10.26.23)
Market’s At RISK in The Mega Cap Bloodbath! | Moxie Indicator Minutes (10.26.23) - YouTube
Still Bullish BUT Proceeding With Caution | Your Daily Five (10.26.23) Note comment from Tom Bowley that the next 9 trading days during the past 73 tears have been the strongest nine trading days of the year for the S&P 500.
Still Bullish BUT Proceeding With Caution | Your Daily Five (10.26.23) - YouTube
We’re set up for a year-end rally after 1-2 more weeks of choppiness: Hightower’s Stephanie Link
Where to Find Stock Opportunities in Bear Territory | The Final Bar (10.27.23)
https://www.youtube.com/watch?v=lB3t6lxWUDU
My Downside Targets for the S&P 500
My Downside Targets for the S&P 500 | The Mindful Investor | StockCharts.com
Consumer Spending Remains Strong – Here Are 3 Stocks For Your Watch List
Stock Market Indexes Shatter Critical Support Levels. Watch the March Lows.
Calculating The Decline as Indexes Shift From Distribution to Markdown | Power Charting (10.27.23)
Technical Scoop from David Chapman and www.EnrichedInvesting.com
Technical Notes from Friday
Canadian Dollar $CDW moved below US71.21 cents extending an intermediate downtrend.
Italy iShares $EWI moved below $29.19 extending an intermediate downtrend.
S&P 100 stocks moving below support and extending an intermediate downtrend included
US Bancorp on a move below $30.63, Abbvie on a move below $142.32 and VeriSign on a move below $198.34.
CDW $CDW a NASDAQ 100 stock moved below $197.28 completing a double top pattern.
Paychex $PAYX a NASDAQ 100 stock moved below $110.52 extending an intermediate downtrend.
TSX 60 stocks moving below support extending an intermediate downtrend included
Bausch Health on a move below Cdn$9.16, Thomson Reuters on a move below Cdn$165.30 and Brookfield on a move below Cdn$40.40
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 4.60 on Friday and 4.80 last week to 10.60. It remains Oversold. Daily downtrend was extended. The intermediate low at 8.60 on August 5th is being tested.
The long term Barometer dropped 3.80 on Friday and 8.20 last week to 24.60. It remains Oversold. Daily downtrend was extended. An intermediate low has yet to appear.
TSX Momentum Barometers
The intermediate term Barometer added 3.08 on Friday, but slipped 0.44 last week to 27.75. It remains Oversold. Low was set on October 5th
The long term Barometer added 0.44 on Friday, but dropped 2.21 last week to 28.19. It remains Oversold. Daily trend remains down.
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
| More from the network: |