Tech Talk for Monday September 25th 2023
U.S. equity index futures were lower this morning. S&P 500 futures were down 13 points at 8:30 AM EDT.
Walt Disney added $0.60 to $81.85 and Netflix gained $3.74 to $383.55 on news that the Writers Guild and the movie studios have reached a tentative labour agreement.
Amazon advanced $1.23 o $130.35 after announcing a $4 billion investment in Anthropic, a company involved in Artificial Intelligence development.
Dow Inc. added $0.82 to $51.07 after JP Morgan upgraded the stock to Overweight.
Nike dropped $1.16 to $89.69 after Jefferies downgraded the stock from Buy to Hold. Target was reduced from $140 to $100.
EquityClock's Daily Comment
Headline reads "Consumers are leaning into credit card debt at an above average rate and, with delinquencies on the rise, the risks to the economy are growing".
https://equityclock.com/2023/09/23/stock-market-outlook-for-september-25-2023/
The Bottom Line
North American equity indices and related stocks are closely following their weakest period of the year from the second week in September to the second week in October. Broadly based U.S. equity indices completed Double Top or Head & Shoulders patterns (including a double top pattern the Dow Jones Industrial Average on Friday). Intermediate term barometers for the TSX and S&P 500 already have reached oversold levels, but have yet to show signs of bottoming.
Investors are responding to concerns that high interest rates in both countries will not come down any time soon. Yields on long term bonds in both countries spiked higher late last week Yield on 10 year U.S. Treasuries reached a 16 year high.
Hope springs eternal! Prospects beyond the third quarter earnings report season in October continue to show a significant recovery in revenues and earnings by major U.S. and Canadian companies starting in the fourth quarter and continuing into the first two quarters of 2024.
Preferred equity trading strategy is to be patient for now, but be prepared to return to "risk on" positions when technical signs of an intermediate bottom have been reached.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.Factset.com
Consensus estimates for remainder of 2023 were dampened slightly last week. Consensus for the third quarter is an earnings decrease on a year-over-year basis of 0.2% (versus previous increase of 0.2%). Third quarter revenues are expected to increase 1.5%. Fourth quarter earnings are expected to increase 8.2%. Fourth quarter revenues are expected to increase 3.8% (versus a 3.7% increase last week). For all of 2023, consensus calls for an earnings increase of 1.1% (versus a gain of 1.2% last week). Revenues are expected to increase 2.4%.
The recovery continues into 2024. Consensus for the first quarter on a year-over-year basis is an earnings increase of 8.6 % (versus previous 8.2% increase last week) and a revenue increase of 4.7% (versus previous 3.7% estimate). Consensus for the second quarter is a 12.1% earnings increase and a 5.5% revenue increase, unchanged from last week. Consensus for all of 2024 is an increase in earnings of 12.2% (versus previous estimate at 12.0%) and a 5.6% increase in revenues.
Economic News This Week
Source: www.Investing.com
August U.S. New Home Sales released at 10:00 AM EDT on Tuesday are expected to drop to 700,000 units from 714,000 units in July.
August Durable Goods Orders released at 8:30 AM EDT on Wednesday are expected to decline 1.6% versus a drop of 5.2% in July.
Second quarter update on U.S. GDP released at 8:30 AM EDT on Thursday is expected to increase at an annual rate to 2.2% from a previous estimate at 2.0%.
Federal Reserve Chairman Powell is scheduled to speak at 4:00 PM EDT on Thursday.
August Core PCE Price Index released at 8:30 AM EDT on Friday is expected to increase to increase 0.2% versus a gain of 0.2% in July.
August Personal Income released at 8:30 AM EDT on Friday is expected to increase 0.4% versus a gain of 0.2% in July. August Personal Sending is expected to increase 0.5% versus a gain of 0.8% in July.
July monthly Canadian real GDP released at 8:30 AM EDT on Friday is expected to be unchanged versus a decline of 0.2% in June.
September Chicago PMI is released at 9:45 AM EDT on Friday
September Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to remain unchanged from August at 67.7.
Selected Earnings News This Week
Source: www.Investing.com
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for September 22nd 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 September 22nd 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for September 22nd 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 Talks for September 23rd
Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)
Mark Leibovit: Value of US Dollar Tied to Interest Rates
"Go" Trends in Rates & Dollar Causing Problems for Equity | GoNoGo Charts (09.21.23)
https://www.youtube.com/watch?v=gPOmSOKuUKU
Stock Market CRASH Right On Schedule | Your Daily Five (09.21.23)
Stock Market CRASH Right On Schedule | Your Daily Five (09.21.23) - YouTube
Learn to Trade Important Trend Changes With Bollinger Bands | Your Daily Five (09.22.23)
Learn to Trade Important Trend Changes With Bollinger Bands | Your Daily Five (09.22.23) - YouTube
Interest rates stay higher because the economy’s good and stocks are following suit: BMO’s Belski
It’s Time to Get Long (by the last day of September) Larry Williams
It’s Time to Get Long | Larry Williams Focus On Stocks | StockCharts.com
S&P 500 Head and Shoulders Top Confirmed, Target 4100: David Keller
S&P 500 Head and Shoulders Top Confirmed | The Mindful Investor | StockCharts.com
Bob Hoye Sep 22, 2023: What is the outlook for Gold?
China's Real Estate Meltdown Sees Arrests - HoweStreet
Trading Desk Notes For September 23, 2023 Victor Adair
Trading Desk Notes For September 23, 2023 - HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.com
Technical Action on Friday
Dow Jones Industrial Average $INDU moved below $34,093.65 completing a double top pattern. Its related ETF $DIA moved below $339.45 completing a double top pattern.
Biotech ETF $FBT moved below $146.26 extending an intermediate downtrend.
Major Banks and their related ETFs moved below intermediate support including Bank of American $BAC, Bank of New York Mellon $BK and Blackrock $BLK
S&P 500 Momentum Barometers
The intermediate term Barometer slipped 0.60 on Friday and plunged 15.00 last week to 19.20. It remains Oversold. Daily trend remains down.
The long term Barometer dropped 1.00 on Friday and plunged 10.60 last week to 43.80. It remains Neutral. Daily trend remains down.
TSX Momentum Barometers
The intermediate term Barometer slipped 0.44 on Friday and plunged 28.01 last week to 28.63. It changed from Neutral to Oversold on a move below 40.00. Daily trend remains down.
The long term Barometer dropped 0.44 on Friday and plunged 14.78 last week to 40.53. It remains Neutral. 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
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