Tech Talk for Monday December 9th 2019

U.S. equity index futures were mixed this morning. S&P 500 futures were down 2 points in pre-opening trade.

The Canadian Dollar was virtually unchanged at U.S.75.45 cents following release of Canada's November Housing Starts report. Consensus was an increase to 205,000 from 202,000 in October. Actual was 201,300.

Carnival added $0.18 to $44.95 after JP Morgan raised its target price to $48 from $46.

TJX Companies (TJX $59.84) is expected to open higher after Cowen raised its target price to $71 from $64

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/12/06/stock-market-outlook-for-december-9-2019/

Note seasonality charts on U.S. Non-farm Payrolls and Canadian Employment

The Bottom Line

World equity markets continued their intermediate uptrend last week despite short term turbulence early in the week. Strength was recorded despite recent concerns including an earnings recession by major U.S. companies until the first quarter next year, growing efforts by the Democrats to impeach Donald Trump, continuing trade uncertainties between China and the U.S. and growing Middle East and Hong Kong tensions. Seasonal influences remain positive for most equity markets until the first week in January

Observations

Seasonal influences this year continue to follow their historic pattern. Seasonal influences on U.S. and Canadian equity markets turned positive in the second half of October. Seasonal influences for equity markets in other developed nations turned positive in early October.

Two political events are expected to impact equity markets this week: The United Kingdom election on Thursday December 12th and end of current tariffs on Chinese exports to the U.S. on Sunday December 15th. Current polls suggest that the Conservatives will win a majority in the U.K. election. Consensus is that current tariffs on U.S./China trade will be extended.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) were virtually unchanged last week, but remain intermediate overbought.

Medium term technical indicators for Canadian equity markets also were virtually unchanged last week, but remain intermediate overbought.

Most short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) recovered strongly on Friday from turbulence earlier in the week.

Short term technical indicators for Canadian markets and sectors also recovered strongly on Friday from turbulence earlier this week

Consensus for revenues and earnings by S&P 500 companies were virtually unchanged from our last review on November 25th. According to FactSet, fourth quarter earnings are expected to decrease 1.5% (versus previous estimate of a drop of 1.4%) and fourth quarter revenues are expected to increase 2.6% (versus a previous estimate of 2.5%). For all of 2019, earnings are expected to increase 0.2% (versus 0.1%) and revenues are expected to increase 3.8%. First quarter 2020 earnings are expected to increase 5.2% (versus 5.3%) and revenues are expected to increase 4.4 %. Second quarter 2020 earnings are expected to increase 6.7% and revenues are expected to increase 4.9%. Earnings for all of 2020 are expected to increase 9.8% (versus 9.9%) and revenues are expected to increase 5.5%.

Economic News This Week

November Canadian Housing Starts to be released at 8:15 AM EST on Monday are expected to increase to 207,000 from 202,000 in October.

November U.S. Consumer Price Index to be released at 8:30 AM EST on Wednesday is expected to increase 0.2% versus a gain of 0.4% in October. Excluding food and energy, November CPI is expected to increase 0.2% versus a gain of 0.2% in October.

FOMC Meeting results are released at 2:00 PM EST on Wednesday. The Fed Fund rate is expected to remain unchanged at 1.75%. Press conference is scheduled at 2:30 PM EST

November U.S. Producer Price Index to be released at 8:30 AM EST on Thursday is expected to increase 0.2% versus a gain of 0.4% in October. Excluding food and energy, November PPI is expected to increase 0.2% versus a gain of 0.3% in October.

Weekly Initial Jobless Claims to be released at 8:30 AM EST on Thursday are expected to increase to 212,000 from 203,000 last week.

November U.S. Retail Sales to be released at 8:30 AM EST on Friday are expected to increase 0.4% versus a gain of 0.3% in October. Excluding auto sales, November U.S. Retail Sales are expected to increase 0.4% versus a gain of 0.2% in October.

October Business Inventories to be released at 10:00 AM EST on Friday are expected to increase 0.2% versus no change in September.

Earnings News This Week

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 6th 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for December 6th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for December 6th 2019

Green: Increase from previous day

Red: Decrease from previous day

Greg Schnell's Market Buzz

Released on Friday. Following is a link:

https://www.youtube.com/watch?v=z5orA_gU9UY&feature=youtu.be

Greg takes a bullish stance on the energy sector.

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

StockTwits released on Friday @EquityClock

Alphabet $GOOG $GOOGL, a NASDAQ 100 stock moved above $1,335.53 and $1,335.92 respectively to all-time highs extending an intermediate uptrend.

Canadian Pacific $CP.CA, a TSX 60 stock moved above $322.79 to an all-time high extending an intermediate uptrend

Emerson Electric $EMR, an S&P 100 stock moved above $75.03 extending an intermediate uptrend.

Accenture $ACN, an S&P 100 stock moved above $201.93 to an all-time high extending an intermediate uptrend.

Goldman Sachs $GS, a Dow Jones Industrial stock moved above $223.51 extending an intermediate uptrend.

Oil stocks on both sides of the border are moving higher following OPEC’s decision to restrain oil production. Canadian Natural Resources $CNQ.CA, a TSX 60 stock moved above $38.00 extending an intermediate uptrend.

Oil and Gas Services stocks are moving higher on both sides of the border. Precision Drilling $PD.CA moved above $1.58 completing a base building pattern.

Another Canadian "gassy" stock breakout! Freehold Royalties $FRU.CA moved above $6.91 completing a base building pattern.

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average was unchanged last week at 72.95. Percent is intermediate overbought, but continues to trend higher.

Bullish Percent Index for S&P 500 stocks slipped last week to 72.80 from 74.00. The Index remains intermediate overbought, but maintains an uptrend.

TSX Momentum Barometers

Percent of TSX stocks trading above their 50 day moving average slipped last week to 68.84 from 70.78. Percent remains intermediate overbought, but maintains an uptrend.

Bullish Percent Index for TSX stocks increased last week to 70.82 from 69.10. The Index remains intermediate overbought, but continues to move higher.

Disclaimer: Seasonality 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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