Tech Talk for Monday October 7th 2024

U.S. equity index futures were lower this morning. S&P 500 futures were down 22 points at 8:30 AM EDT.

Index futures responded to an escalation of the Middle East conflict. WTI Crude Oil added another $2.07 to $76.41 per barrel. Crude oil prices also were impacted by strengthening of Hurricane Milton in the Gulf of Mexico to a category #3.

Chevron added $1.84 to $152.58 after its Canadian subsidiary announced sale of its 20% interest in Canadian Oil Sands to Canadian Natural Resources for US$6.5 billion.

Apple dropped $3.06 to $223.74 after Jefferies downgraded the stock from Buy to Hold.

Amazon dropped $3.64 to $182.94 after Wells Fargo downgraded the stock

EquityClock's Stock Market Outlook for October 7th

The larger than average rise in employment for September, manipulated by seasonal adjustments, has opened up headwinds against stocks that were not apparent previous.

See:

https://equityclock.com/2024/10/05/stock-market-outlook-for-october-7-2024/

The Bottom Line

Focus this week is on September U.S. inflation reports. Consensus calls for a slight reduction for September CPI and September PPI on a monthly basis and year-over-year basis.

Official launch of the third quarter report season starts on Friday when results by some of the biggest U.S. banks are released. As noted below, third quarter earnings by S&P 500 companies will "not be much to cheer about". Favourable anticipation prior to release of quarterly results is expected to be muted at best. Notable concern is results from the financial sector. According to FactSet, consensus calls for a 0.4% year-over-year earnings drop by the Financial sector and a 12% earnings drop by the Bank sub-sector.

Old stock market trading folklore says "Sell Rosh Hashanah, buy Yom Kipper!" Historically, U.S. equity indices have recorded a brief downward correction during this period. This year the period is from the close on October 2nd to October 12th. Chances are high that the saying will happen again this year.

Geopolitical events are expected to continue to have an impact on selected equity markets and stocks.

• Defense stocks and related ETFs are responding to growing tensions in the Middle East and Ukraine
• Far East equity indices and commodity prices are responding to China's efforts to reflate its economy.

Consensus for Earnings and Revenues by S&P 500 companies

Source: www.factset.com

Earnings and revenue estimates for remainder of 2024 and for 2025 were lowered slightly last week, typical just prior to start of the quarterly report season.

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 4.2% increase, down from 4.6% last week. Consensus for third quarter revenues calls for a 4.7% year-over-year increase (versus a 4.8% increase last week).

Earnings and revenue gains accelerate in the fourth quarter, but at a slightly lower rate. Consensus calls for a 14.6% increase in earnings (versus a 14.9% increase last week) and a 5.1% revenue increase (versus a 5.3% increase last week).

For all of 2024, consensus calls for a 9.8% earnings increase (versus a 10.0% increase last week) and 5.0% revenue increase (versus a 5.1% increase last week).

Earnings gains accelerate in 2025, but at a slightly lower rate. First quarter earnings are expected to increase 14.0 % on a year-over-year basis (versus a 14.5% increase last week) and revenues are expected to increase 5.5% (versus a 5.7% gain last week). Second quarter earnings are expected to increase 13.3% (versus a 13.6% gain last week) and revenues are expected to increase 5.4% (versus 5.5% last week). For all of 2025 earnings are expected to increase 14.9% (versus a 15.1% increase last week) and revenues are expected to increase 5.9%.

Economic News This Week

Source: www.Investing.com

August U.S. Trade released at 8:30 AM EDT on Tuesday is expected to be a deficit of $72.3 billion versus a deficit of $78.8 billion in July.

August Canadian Trade released at 8:30 AM EDT on Tuesday is expected to be a $500 million surplus versus a $680 million surplus in July.

U.S. September Consumer Price Index released at 8:30 AM EDT on Thursday is expected to increase 0.1% versus a gain of 0.2% in August. On a year-over-year basis, September CPI is expected to increase 2.3% versus a gain of 2.5% in August. Excluding food and energy, September CPI is expected to increase 0.2% versus a 0.3% gain in August.

U.S. September Producer Price Index released at 8:30 AM EDT on Friday is expected to increase 0.1% versus a gain of 0.2% in August. Excluding food and energy, September Producer Price Index is expected to increase 0.2% versus a 0.3% gain in August.

Canadian September Employment released at 8:30 AM EDT on Friday is expected to increase 33,700 versus a 22,100 gain in August. September Unemployment Rate is expected to remain unchanged from August at 6.6%.

Michigan October Consumer Sentiment released at 10:00 AM EDT on Friday is expected to increase to 70.2 from 70.1 in September.

Selected Earnings News This Week

Source: www.Investing.com

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for October 4th 2024

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 4th 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for October 4th 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 5th

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

Will China's stimulus blitz help U.S. markets? Mark Leibovit

Will China's Stimulus Blitz Help US Markets? - HoweStreet

Will Technology Drive S&P Higher in October? Julius de Kempaneur

Includes a discussion on seasonality

https://www.youtube.com/watch?v=yCbk55JJzNM

CHART THIS with David Keller, CMT Friday 10/4/24

https://www.youtube.com/watch?v=Eqd6NXIF9SA

Jobs Soar Past Estimates, But What Happens Next? Tom Bowley

Jobs Soar Past Estimates, But What Happens Next? | Trading Places with Tom Bowley | StockCharts.com

Does the Market Have Bad Breadth? David Keller

Does the Market Have Bad Breadth? | The Mindful Investor w/ David Keller, CMT | StockCharts.com

NASDAQ: A scenario: Wycoff Market

https://www.youtube.com/shorts/7Zl5NoYBc4s

How Realistic is the BRICS' Proposed Gold Backed "Unit"? Bob Hoye

How Realistic is the BRICS' Proposed Gold Backed "Unit"? - HoweStreet

Canadian Businesses Closing at an Alarming Rate: Danielle Park

Canadian Businesses Closing at an Alarming Rate - HoweStreet

Iran's Threat To Use It's Largest And Most Lethal Ballistic Missiles To Attack Israel Lifted The Crude Oil War Premium by US$5/b: Josef Schachter

Iran's Threat To Use It's Largest And Most Lethal Ballistic Missiles To Attack Israel Lifted The Crude Oil War Premium by US$5/b - HoweStreet

The 2024 US Senate Map Based on the Latest Polls in EVERY KEY RACE!

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

Technical Scoop for October 7th from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/library/

Chart of the Day: TSX Base Metals iShares (XBM.TO)

Technical score has improved recently to 4 thanks to a rising interest in securities that benefit from an economic recovery in China. Seasonal influences have turned positive: Buy on weakness

Technical Score

Intermediate trend: Up 2

Strength relative to S&P 500: Positive 2

Trades above its 20 day moving average: Yes 1

Daily momentum: (Stochastics, RSI, MACD): Turned lower -1

Total 4

Technical Notes for Friday

S&P Oil and Gas Exploration SPDRs $XOP moved above $137.04 and $141.38 resuming an intermediate uptrend.

Oil Services iShares $OIH moved above $299.99 extending an intermediate uptrend.

BMO Equal Weight Canadian Energy ETF $ZEO.TO moved above Cdn$74.27 to an all-time high extending an intermediate uptrend.

Silver iShares $SLV moved above $29.56 to a 10 year high extending an intermediate uptrend.

S&P 100 and NASDAQ 100 stocks moving above resistance extending an intermediate uptrend included CVS Health, Diamondback Energy, Atlassian Corp and Datadog.

S&P 100 and NASDAQ 100 stocks moving below support setting an intermediate downtrend included Coca Cola, Merck and American Tower.

S&P 500 Momentum Barometers

The intermediate term Barometer added 2.80 on Friday, but dropped 7.60 last week to 76.00. It remains Overbought.

The long term Barometer added 1.40 on Friday, but dropped 4.40 last week. It remains Overbought.

TSX Momentum Barometers

The intermediate term Barometer added 1.79 on Friday and gained 0.91 last week to 82.51. It remains Overbought. Daily uptrend was extended.

The long term Barometer added 0.90 on Friday and gained 1.79 last week to 79.82. 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