Tech Talk for Monday January 22nd 2024
U.S. equity index futures were higher this morning. S&P 500 futures were up 19 points at 8:30 AM EST.
Boeing dropped $3.46 to $211.56 after the FAA recommended a door plug inspection on another 737 aircraft model.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/01/clip_image0011-4.png "clip_image001[1]")
Archer Daniels Midland fell $8.12 to $60.07 after launching a probe on its accounting.
Macy's added $0.47 to $18.10 after its board of directors rejected a private company buyout offer valued at $5.8 billion.
![clip_image003[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/01/clip_image0031-4.png "clip_image003[1]")
NuStar Energy jumped $4.08 to $22.11 after Sunoco agreed to purchase the company in an all-stock deal valued at $7.3 billion. Each NuStar share will be exchanged for 0.40 shares of Sunoco.
The Bottom Line
Led by the technology sector, U.S. equity indices (notably S&P 500 Index above 4818.62 and NASDAQ 100 Index above 16,767.86) moved to all-time highs on Friday.
Media focus has been on all-time highs set by the S&P 500 and NASDAQ 100 last week. Other major North American indices have not fare as well: The equally weighted S&P 500 Index and its related ETF: RSP eased 0.15% last week and is down 1.25% since January 1st. The TSX Composite Index eased 0.40% last week and is down 0.25% since January 1st.
A word of caution! The CNN Fear & Greed Index for the S&P 500 Index moved from 66 to 72 on Friday indicating a high and rising Greed (i.e .overbought) Index for U.S. equity markets. See https://www.cnn.com/markets/fear-and-greed. Moreover, Momentum Barometers showing Percent of S&P 500 stocks trading above their 50 day and 200 day moving averages are at Overbought levels and their daily trends have turned down. Ditto for Momentum Barometers for the TSX! See S&P 500 and TSX Momentum Barometers at the end of this report.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Analysts lowered fourth quarter earnings 2023 estimates again last week, but maintained their outlook for accelerating gains in 2024.
Prompted by lower than consensus results released to date, Earnings estimates for the fourth quarter of 2023 were reduced slightly. Fourth quarter earnings are expected to decrease 1.7% on a year-over-year basis (versus previous decrease last week of 0.1%). Estimate for fourth quarter revenues was reduced to a gain of 2.2% from a gain of 2.8% last week.
The earnings recovery 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 5.4 % (versus previous increase of 5.7%) and a revenue increase of 3.9% (versus previous increase of 4.0%).
Earnings gains accelerate thereafter to the end of 2024, all-be-it at a slower pace. Consensus for the second quarter calls for a 10.0% earnings increase (versus previous increase at 10.2%) and a 4.9% increase in revenues (versus 5.0% last week). Consensus for the third quarter calls for an 8.2% increase in earnings (versus previous increase of 8.3%) and a 5.2% increase in revenues. Consensus for the fourth quarter calls for a 22.1% increase in earnings (versus previous increase of 19.8%) and a 5.9% increase in revenues (versus previous increase of 6.0%). For all of 2024, consensus calls for an 12.2% increase in earnings (versus previous increase of 11.8%) and a 5.5% increase in revenues.
Economic News This Week
Source: www.Investing.com
December U.S. Leading Economic Indicators are released at 10:00 AM EST on Monday
Bank of Canada's monetary policy statement is released at 10:00 AM EST on Wednesday. The Bank of Canada's lending rate to major Canadian banks is expected to remain unchanged at 5.00%.
European Central Bank releases its interest rate policy at 8:15 AM EST on Thursday. Overnight lending rate for major banks is expected to remain unchanged at 4.5%.
December Durable Goods Orders released at 8:30 AM EST on Thursday are expected to increase 0.5% versus a gain of 5.4% in November.
First estimate of fourth quarter U.S. GDP released at 8:30 AM EST on Thursday is expected to show growth at an annual 1.8% rate versus growth in the third quarter at an annual 4.9% rate.
December U.S. Home Sales released at 10:00 AM EST on Thursday are expected to increase to 650,000 from 590,000 in November.
Core December PCE Price Index released at 8:30 AM EST on Friday is expected to increase 0.2% versus a gain of 0.1% in November.
December U.S. Personal Income released at 8:30 AM EST on Friday is expected to increase 0.3% versus a gain of 0.4% in November. December U.S. Personal Spending is expected to increase 0.2% versus a gain of 0.2% in November.
Selected Earnings News This Week
Source: www.Investing.com
Another 75 S&P 500 companies are scheduled to release quarterly results this week. Fifty companies have reported results to date. TSX 60 companies begin to report this week starting with Canadian National Railway on Tuesday.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Jan.19th 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 Jan 19th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for Jan.19th 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
Technical Notes for Friday
Technology stocks and related ETFs led the advance by U.S. equity indices on Friday. Semiconductor iShares $SOXX moved above $583.91 to an all-time high. S&P 100 and NASDAQ 100 stock breakouts included Broadcom, KLA Corp, Cadence Design, Texas Instruments, Lam Research, QUALCOMM, PayPal, Applied Materials, Micron and Autodesk.
Waste Connections $WCN.TO a TSX 60 stock moved above Cdn$201.97 to an all-time high extending an intermediate uptrend.
Links offered by valued providers
Why SMALL CAPS MATTER in January 2024 | The Final Bar (01.18.24)
https://www.youtube.com/watch?v=WKx10jwzff4
Top Strategist Expects Stock Rally To Continue In 2024 | On The Tape Investing Podcast
https://www.youtube.com/watch?v=4pHIbctuN98
Jeremy Siegel Shares His 2024 Stock Market Outlook
https://www.youtube.com/watch?v=tjQEeGH7Jzc
Three Behavioral Biases You’re Probably Struggling With Right Now: David Keller
Don’t Ignore This Unusual Event on the Market’s March to New Highs: Mary Ellen McGonagle
Don’t Ignore This Unusual Event on the Market’s March to New Highs | The MEM Edge | StockCharts.com
Has rate cut anticipation run its course? Carl Swenlin
Has Rate Cut Anticipation Run Its Course? | DecisionPoint | StockCharts.com
Michael Campbell's Money Talks for January 20th
January 20th Episode (mikesmoneytalks.ca)
More indications of China's declining economy: Bob Hoye
More Indications of China's Declining Economy - HoweStreet
Groundhog Day Effect: Mark Liebovit
Groundhog Day Effect - HoweStreet
Could Crude Oil Hit $95 a Barrel by December? Josef Schachter
Could Crude Oil Hit $95 a Barrel by December? - HoweStreet
Trading Desk Notes For January 20, 2024: Victor Adair
Trading Desk Notes For January 20, 2024 - HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.com
S&P 500 Momentum Barometers
The intermediate term Barometer added 2.20 on Friday, but dropped 8.60 last week to 75.40. It remains Overbought. Daily trend is down.
The long term Barometer added 0.20 on Friday, but dropped 4.80 last week to 70.80. It remains Overbought. Daily trend is down.
TSX Momentum Barometers
The intermediate term Barometer added 2.22 on Friday, but dropped 10.23 last week to 65.33. It remains Overbought. Daily trend is down.
The long term Barometer added 3.56 on Friday, but dropped 4.00 last week to 58.22. It changed from Overbought to Neutral on a drop below 60.00. 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
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