Tech Talk for Monday February 5th 2024

U.S. equity index futures were lower this morning. S&P 500 futures were down 12 points at 8:30 AM EST.

Estee Lauder advanced $24.69 to $158.81 after fiscal second quarter revenues and earnings exceeded consensus estimates.

McDonald's slipped $1.05 to $296.00 after reporting less than consensus fourth quarter revenues.

Idexx added $2.86 to $530.00 after reporting higher than consensus fourth quarter revenues.

Caterpillar added $12.91 to an all-time high at $328.00 after reporting higher than consensus fourth quarter earnings.

The Bottom Line

Exceptional price gains on Friday by Meta Platform (Up 20.32%) and Amazon (Up 7.87%)

after their release of better-than-consensus quarterly results significantly distorted performance of the S&P 500 Index relative to the Equal Weighted S&P 500 Index and its related ETF: RSP. Since December 28th the S&P 500 Index has gained 3.66%% while RSP has declined 0.13%. On Friday the S&P 500 Index gained 1.07% while RSP dropped 0.09%.

Results released by Meta Platforms and Amazon significantly boosted analyst earnings estimates for S&P 500 companies for the fourth quarter of 2023.. Note: Analysts did not change significantly their estimates for 2024.

Consensus for Earnings and Revenues for S&P 500 Companies

Source: www.FactSet.com

Earnings estimates for the fourth quarter of 2023 were increased significantly on Friday. Fourth quarter earnings now are expected to increase 1.6% on a year-over-year basis (versus a decrease last week of 1.4%). Estimate for fourth quarter revenues was increased to a gain of 3.5% from a gain of 3.2% last week.

A significant earnings recovery by S&P 500 companies first surfaces in the first quarter of 2024, but at a slightly lower than previous rate. Consensus for the first quarter on a year-over-year basis calls for an earnings increase of 4.5% (versus previous increase of 4.6%) and a revenue increase of 3.6% (versus previous increase of 3.9%).

Earnings gains accelerate thereafter to the end of 2024, all-be-it at a slower pace. Consensus for the second quarter calls for a 9.4% earnings increase and a 4.8% increase in revenues. Consensus for the third quarter calls for an 8.1% increase in earnings (versus previous 7.7% increase) and a 5.0% increase in revenues (versus a 4.9% increase last week). Consensus for the fourth quarter calls for a 19.0% increase in earnings (versus previous 21.3% increase) and a 5.6% increase in revenues. For all of 2024, consensus calls for an 11.2% increase in earnings (versus previous 11.6% increase) and a 5.4% increase in revenues.

Economic News This Week

Source: www.Investing.com

January ISM Non-manufacturing PMI released at 8:30 AM EST on Monday is expected to increase to 52.0 from 50.6 in December

Bank of Canada Governor Macklem speaks at 1:00 PM EST on Tuesday

December U.S. Trade Deficit released at 8:30 AM EST on Wednesday is expected to improve to -$62.20 billion from -$63.20 billion in November

December Canadian Trade report is released at 8:30 AM EST on Wednesday

Canadian December Employment Change released at 8:30 AM EST on Friday is expected to increase to 20,000 from 100 in November. December Unemployment Rate is expected to remain unchanged from November at 5.8%.

Selected Earnings News This Week

Source: www.Investing.com

Another 104 S&P 500 companies are scheduled to report this week (including four Dow Jones Industrial Average companies). Another nine TSX 60 companies are scheduled to report.

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Feb.2nd 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 Feb.2nd 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for Feb.2nd 2024

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

Prepare For The Market’s Downward Shift: John Kosar

https://www.youtube.com/watch?v=QwMjR4c49Wk

Bullish Buyers Return After Market Sell-Off: Dave Keller

https://www.youtube.com/watch?v=KdmH70SmgG8

Mega-Caps Are Taking Over The Market! TG Watkins

Mega-Caps Are Taking Over The Market! - YouTube

Michael Campbell's Money Talks for February 3rd

February 3rd Episode (mikesmoneytalks.ca)

Gold is Making Waves within a Long-Term Uptrend: Arthur Hill

Gold is Making Waves within a Long-Term Uptrend | Art’s Charts | StockCharts.com

Strong Earnings Is Driving Sector Rotation Into These 2 Groups: Mary Ellen McGonagle

Strong Earnings Is Driving Sector Rotation Into These 2 Groups | The MEM Edge | StockCharts.com

This Week’s Sector & Industry Group to Watch: Erin Swenlin

This Week’s Sector & Industry Group to Watch | DecisionPoint | StockCharts.com

Comments by Ross Clark, Mark Leibovit and Wolf Richter

This Week in Money - HoweStreet

Technical Scoop from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/wp-content/uploads/2024/02/Break-points-Magnificent-rise-potential-divergence-life-left-inflation-muse-job-issues-possible-bottoms2.pdf

Technical Notes for Friday

Aerospace & Defense ETF $PPA moved above $92.37 to an all-time high extending an intermediate uptrend.

Apple $AAPL an S&P 100 stock moved below $180.17 completing a double top pattern.

Charter Communications $CHTR an S&P 100 stock moved below $357.41 extending an intermediate downtrend.

Target $TGT an S&P 100 stock moved above 144.50 extending an intermediate uptrend.

Wal-Mart $WMT a Dow Jones Industrial Average stock moved above $169.31 to an all-time high extending an intermediate uptrend.

Canadian Natural Resources $CNQ.TO a TSX 60 stock moved below Cdn$82.34 extending an intermediate downtrend.

S&P 500 Momentum Barometers

The intermediate term Barometer dropped 6.60 on Friday and 10.20 last week to 66.40. It remains Overbought. Daily trend is down. Note: Data is equal weighted.

The long term Barometer dropped 4.40 on Friday and 1.20 last week to 72.20. It remains Overbought.

TSX Momentum Barometers

The intermediate term Barometer dropped 4.89 on Friday and 6.66 last week to 62.67. Daily trend turned down on Friday.

The long term Barometer dropped 1.79 to 63.11 on Friday, but gained 1.78 last week to 63.11. 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