Tech Talk for Tuesday May 30th 2023
U.S. equity index futures were higher this morning. S&P 500 futures were up 24 points at 8:30 AM EDT.
Microsoft advanced $4.06 to $336.95 after Wedbush raised its target price from $340 to $375.
Constellation Brands added $1.87 to $234.75 after Roth MKM upgraded the stock from Neutral to Buy.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/05/clip_image0021-13.png "clip_image002[1]")
Broadcom improved $15.29 to $828.02 after KeyBanc Capital raised its target price from $720 to $820.
Coherent jumped $3.51 to $40.44 after announcing a restructure plan.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/05/clip_image0041-8.png "clip_image004[1]")
EquityClocks' Daily Comment
Headline reads "Despite the S&P 500 Index closing higher, last week was generally a losing week for stocks as everything outside of growth/technology sold-off".
http://www.equityclock.com/2023/05/27/stock-market-outlook-for-may-30-2023/
The Bottom Line
Big cap technology stocks and their relation to Artificial Intelligence (AI) dominated upside technical action last week. Excluding companies in this sector, U.S. and Canadian equities moved slightly lower.
Resolution of the U.S. debt ceiling is close. A tentative agreement was reached over the weekend. New deadline officially is Friday June 5th, but unofficially the deadline is June 15th. Brinkmanship typically occurs before a deal is reached, but a deal inevitably is reached.
A higher than consensus April Core PCE Price Index report released on Friday renewed concern that the Federal Reserve has not finished its monetary tightening policy. Consensus now suggests that target for the Fed Fund Rate remains unchanged at its current elevated rate at 5.00%-5.25% and the Rate is likely to be extended until at least the fourth quarter. More information on FOMC thoughts are expected to be released by Federal Research chairman Powell on Tuesday and in the Beige Book on Wednesday. The May U.S. Employment Report on Friday will provide the FOMC with another "data point" prior to their next meeting on June 12th -13th. Comments last week by individual FOMC members tended to be "hawkish" implying retention of the elevated Fed Fund Rate for an extended period of time.
Seasonal influences for broadly based U.S. equity indices tend to be slightly bearish during the first three weeks in June followed by a recovery to the end of July (i.e. after the next FOMC meeting and well into the second quarter earnings report season). Look for history to repeat! For the first time in over a year, analysts have started to raise earnings and revenue estimates just prior to start of the quarterly report season.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.Factset.com
Frequency of first quarter results continues to wind down. Another 2% of reports were released last week with 97% of S&P 500 companies reporting to date: 78% have reported higher than consensus earnings per share and 76% have reported higher than consensus revenues (up from 75% last week). Consensus calls for a year-over-year drop in first quarter earnings of 2.1% (versus a drop of 2.2% last week) and an increase in first quarter revenues of 4.1%.
Earnings and revenue estimates for remainder of the year improved slightly .Consensus for the second quarter calls for a drop of 6.3% in earnings (versus a drop of 6.4% last week) and a drop of 0.3% in revenues. Consensus for the third quarter calls for an increase of 1.0% in earnings (versus an increase of 0.7% last week) and a 1.2% increase in revenues (versus an increase of 1.1% last week). Consensus for the fourth quarter calls for an 8.4% increase in earnings (up from 8.2% last week) and a 3.2% increase in revenues (up from 3.1% last week). For all of 2023, consensus calls for an increase of 1.3% in earnings (up from 1.0% last week) and a 2.4% increase in revenues.
Economic News This Week
March Canadian Real GDP released at 8:30 AM EDT on Wednesday is expected to increase 0.2% versus a gain of 0.1% in February.
April JOLTs Job Openings Report released at 10:00 AM EDT on Wednesday is expected to increase to 9.775,000 from 9,590.000 in March.
Beige Book is released at 2:00 PM EDT on Wednesday
April U.S. Construction Spending released at 10:00 AM EDT on Thursday is expected to increase 0.1% versus a gain of 0.3% in March.
May ISM Manufacturing PMI released at 10:00 AM EDT on Thursday is expected to slip to 47.0 from 47.1 in April.
May Non-farm Payrolls released at 8:30 AM EDT on Friday is expected to drop to 180,000 from 253,000 in April. May Unemployment Rate is expected to increase to 3.5% from 3.4% in April. May Average Hourly Earnings are expected to increase 0.4% versus a gain of 0.5% in April.
Selected Earnings News This Week
Source: www.investing.com
Nine S&P 500 companies (including one Dow Jones Industrial company: Salesforce.com) are scheduled to release quarterly reports this week. Two TSX 60 company are scheduled to release, National Bank and CAE.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 26th 2023
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for May 26th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 26th 2023
Green: Increase from previous day
Red: Decrease from previous day
Source for positive seasonal ratings: www.equityclock.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
Links offered by valued providers
Mark Leibovit's Weekly Comment
https://www.howestreet.com/2023/05/us-debt-ceiling-default-and-us-dollar-mark-leibovit/
Rocket Launches Fire Across Tech Space Greg Schnell May 26, 2023
Rocket Launches Fire Across Tech Space | The Canadian Technician | StockCharts.com
Michael Campbell's Money Talks for May 27th
Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)
The Downside to This Up Market David Keller May 26, 2023
The Downside to This Up Market | The Mindful Investor | StockCharts.com
Here’s a Fresh Look at the Markets Using a Longer-Term Lens Mary Ellen McGonagle May 26, 2023
Here’s a Fresh Look at the Markets Using a Longer-Term Lens | The MEM Edge | StockCharts.com
Gold’s Wild Ride: A Bullish Uptrend or a Bearish Freefall? Karl Montevirgen May 22, 2023
The Technical Analysis Mailbag Is Open! | David Keller, CMT | The Final Bar (05.26.23)
The Technical Analysis Mailbag Is Open! | David Keller, CMT | The Final Bar (05.26.23) - YouTube
Swing Trading Analysis: Semiconductors | Bruce Fraser | Power Charting (05.26.23)
Swing Trading Analysis: Semiconductors | Bruce Fraser | Power Charting (05.26.23) - YouTube
NASDAQ Topping … IMMINENT COLLAPSE Ahead! | Jeffrey Huge, CMT | Your Daily Five (05.25.23)
NASDAQ Topping … IMMINENT COLLAPSE Ahead! | Jeffrey Huge, CMT | Your Daily Five (05.25.23) - YouTube
Technical Scoop by David Chapman and www.EnrichedInvesting.com
Links offered by Mark Bunting and www.uncommonsenseinvestor.com
Why Economic and Earnings Recessions May Already Be Over – Uncommon Sense Investor
Fred Hickey: <
Technical Notes for Friday
Taiwan iShares $EWT moved above $46.10 extending a reverse Head & Shoulders pattern. It caught the "IA" wave with Taiwan Semiconductor leading the advance.
Auto ETF $CARZ moved above $51.09 and $51.75 completing a reverse Head & Shoulders pattern. Responding to Ford's deal with Tesla to recharge its electric cars using Tesla's facilities
Accenture $ACN an S&P 100 stock moved above $302.70 extending an intermediate uptrend.
Target $TGT an S&P 100 stock moved below $137.88 extending an intermediate downtrend.
NASDAQ 100 stocks moving above resistance extending an intermediate uptrend:
KLA Tencor $KLAC moved above $448.27 to an all-time high. Netflix $NFLX moved above $379.43. Adobe $ADBE moved above $402.49. Marvel Technology $MRVL moved above $49.41.
S&P 500 Momentum Barometers
The intermediate term Barometer added 3.60 on Friday, but dropped 15.00 last week to 35.60. It changed from Neutral to Oversold on a move below 40.00. Daily trend is down.
The long term Barometer added 2.80 on Friday, but dropped 6.00 last week to 44.00. It remains Neutral. Daily trend is down.
TSX Momentum Barometers
The intermediate term Barometer added 4.31 on Friday, but dropped 14.23 last week to 38.36. It changed from Neutral to Oversold on a move below 40.00. Daily trend is down.
The long term Barometer was unchanged on Friday at 50.43, but dropped 6.03 last week. It remains Neutral. Daily trend is 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: |