Tech Talk for Monday June 12th 2023
U.S. equity index futures were higher this morning. S&P 500 futures were up 9 points at 8:30 AM EDT.
Illumina dropped $2.19 to $200.53 after the company's Chief Executive Officer resigned.
Chinook Therapeutics jumped $15.88 to $39.89 after Novartis agreed to purchase the company for $40 per share. Value of the offer is $3.5 billion.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/06/clip_image0021-4.png "clip_image002[1]")
Carnival advanced $0.72 to $13.81 after JP Morgan upgraded the stock from Neutral to Overweight.
Petrobras added $0.02 to $13.78 after JP Morgan upgraded the stock from Neutral to Overweight.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2023/06/clip_image0041-3.png "clip_image004[1]")
EquityClock's Daily Comment
Headline reads "The change of unemployment in Canada is showing the strongest pace on record outside of a defined recession."
http://www.equityclock.com/2023/06/10/stock-market-outlook-for-june-12-2023/
The Bottom Line: Watching for responses to bad news!
Investors are confronted with a series of bad news events this week:
? News from the FOMC meeting on Wednesday. Members of the Committee hinted that they will "stand pat" with the current Fed Fund Rate at 5.00%-5.25% in anticipation of more "data points" (including the May Consumer Price Index on Tuesday and the May Producer Price index Wednesday). Consensus calls for a 0.25% increase in the Fed Fund Rate to 5.25%-5.50% at the next meeting on July 25th/July 26th. Responses to the report by individual FOMC members and by analysts on Wednesday will provide short term guidance for traders
? A difficult second quarter earnings report season. Quarterly earnings declines on a year-over-year basis by major companies on both sides of the border are expected to accelerate. On the other hand, analysts are projecting a bottoming of quarterly earnings in the third quarter followed by a strong recovery in the fourth quarter of 2023 followed by robust gains in 2024. Responses to a relatively small number of quarterly reports released this week will be watched closely.
? A changing intermediate term technical picture. Momentum leadership last week by the technology sector faded while the technical picture in other economic sensitive sectors improved. Most notable was strength in the Consumer Discretion and Industrial sectors.
? Negative seasonal influences for U.S. and Canadian broadly based equity indices and related ETFs. They have a history of moving lower during the second and third weeks in June followed by an important recovery starting late in the month that lasts through July (and occasionally can last to early September). Expiry of the June listed options cycle late this week and early next week tends to raise volatility. See Tom Bowley's link below. Note his favourable comments on the Industrial sector.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.Factset.com
Earnings and revenue estimates for remainder of the year eased slightly again. Consensus for the second quarter calls for a drop of 6.4% in earnings and a drop of 0.4% in revenues (versus a drop of 0.3% last week). Consensus for the third quarter calls for an increase of 0.8% in earnings (versus an increase of 0.9% last week) and a 1.2% increase in revenues. Consensus for the fourth quarter calls for an 8.2% increase in earnings (versus an increase of 8.3% last week) and a 3.2% increase in revenues (versus an increase of 3.5% last week). For all of 2023, consensus calls for an increase of 1.2% in earnings and a 2.4% increase in revenues.
Earnings and revenue growth continues beyond the fourth quarter. Consensus for 2024 calls for a 12.3% increase in earnings and a 4.9% increase in revenues.
Economic News This Week
Source: www.Investing.com
May U.S. Consumer Price Index released at 8:30 AM EDT on Tuesday is expected to increase 0.3% versus a gain of 0.4% in April. Excluding food and energy, May CPI is expected to increase 0.4% versus a gain of 0.4% in April
May U.S. Producer Price Index released at 8:30 AM EDT on Wednesday is expected to increase 0.2% versus a gain of 0.2% in April. On a year-over-year basis May PPI is expected to increase 1.1% versus a gain of 2.3% in April. On a year-over-year basis Core May PPI is expected to increase 2.9% versus a gain of 3.2% in April.
Fed Fund Rate released at 2:00 PM EDT on Wednesday is expected to remain unchanged at 5.0%-5.25%. Press conference is held at 2:30 PM EDT.
May Retail Sales are released at 8:30 AM EDT on Thursday.
June Empire State Manufacturing Survey is released at 8:30 AM EDT on Thursday.
June Philly Fed Index is released at 8:30 AM EDT on Thursday.
May U.S. Capacity Utilization released at 9:15 AM EDT on Thursday is expected to remain at 79.7 set in April. May Industrial Production is expected to increase 0.1% versus a gain of 0.5% in April.
June Michigan Consumer Sentiment is released at 10:00 AM EDT on Friday.
Selected Earnings News This Week
Source: www.Investing.com
Quiet week for earnings reports on both sides of the border!
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for June 9th 2023
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for June 9th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for June 9th 2023
Green: Increase from previous day
Red: Decrease from previous day
Source for positive seasonal ratings: www.equityclock.com
Links offered by valued providers
Money Talks with Michael Campbell: June 10th
Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)
Short-Term Pain, Long-Term Gain | Tom Bowley | Your Daily Five (06.09.23)
(Note comments on the Industrials)
Short-Term Pain, Long-Term Gain | Tom Bowley | Your Daily Five (06.09.23) - YouTube
Friday Changed the Market’s Character | TG Watkins | Moxie Indicator Minutes (06.09.23)
(Note comment on the Gold Miners ETF: GDX)
Friday Changed the Market’s Character | TG Watkins | Moxie Indicator Minutes (06.09.23) - YouTube
The Super Bullish to the Super Bearish David Keller June 09, 2023 at 07:37 PM
The Super Bullish to the Super Bearish | The Mindful Investor | StockCharts.com
Down-and-Out Stocks Entering New Uptrends – These 8 Traits Will Help You Pick a Winner Mary Ellen McGonagle June 09, 2023 at 09:41 PM
Indexes Level Off Greg Schnell June 09, 2023 at 01:01 PM
Indexes Level Off | The Canadian Technician | StockCharts.com
S&P 4300 Tested Again, And Failed Again | David Keller, CMT | The Final Bar (06.09.23)
S&P 4300 Tested Again, And Failed Again | David Keller, CMT | The Final Bar (06.09.23) - YouTube
Comments by Ross Clark, Mark Leibovit and Ian Prittie
This Week in Money - HoweStreet
June 9, 2023 | US Hotel Developers Hit By Drying Up Credit: Bob Hoye
US Hotel Developers Hit By Drying Up Credit - HoweStreet
Victor Adair Jun 10, 2023: Trading Desk Notes for June 10th
Trading Desk Notes For June 10, 2023
Links from Mark Bunting and www.uncommonsenseinvestor.com
"We Have 25% Cash and Have Hedged 25-30% of Our Portfolio." – Uncommon Sense Investor
Stock Idea to Capitalize on "Enormous Amounts" of Infrastructure Spending – Uncommon Sense Investor
Technical Scoop from David Chapman and www.EnrichedInvesting.com
Chart of the Day
The S&P Industrial Sector and its related SPDRs have a history of setting a low in late June for a seasonal trade lasting to mid-September. Frequently, strength continues to early December.
Technical score improved this week from -2 to +4:
From -2-2 +1+1= -2 to (0+2+1+1=4
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
General Motors $GM an S&P 100 stock moved above intermediate resistance at $36.71.
Match $MTCH a NASDAQ 100 stock moved above intermediate resistance at $41.42.
Incyte $INCY a NASDAQ 100 stock moved below $61.91 to a 42 month low extending an intermediate downtrend.
Saputo $SAP.TO a TSX 60 stock moved below $33.06 completing a double top pattern.
Brookfield Infrastructure $BIP a TSX 60 stock moved above US$37.01 extending an intermediate uptrend.
Couche Tard $ATD.TO a TSX 60 stock moved below Cdn$64.58 extending an intermediate downtrend.
S&P 500 Momentum Barometers
The intermediate term Barometer dipped 0.40 on Friday, but added 4.80 last week to 57.20. It remains Neutral.
The long term Barometer eased 0.20 on Friday, but added 4.40 last week to 57.40. It remains Neutral.
TSX Momentum Barometers
The intermediate term Barometer dropped 3.88 n Friday and fell 6.03 last week to 36.21. It changed from Neutral to Oversold on a move blow 40.00.
The long term Barometer dropped 1.29 on Friday and fell 2.16 last week o 50.86. It remains Neutral.
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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