Tech Talk for Tuesday September 6th 2022
U.S. equity index futures were higher this morning. S&P 500 futures were up 23 points in pre-opening trade.
Bed Bath & Beyond dropped $1.21 to $7.42 on news that the company's Chief Financial Officer died by suicide.
Discover Financial slipped $0.28 to $99.25 after JP Morgan downgraded the stock from Overweight to Neutral.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/09/clip_image0021-2.png "clip_image002[1]")
FedEx dropped $3.32 to $205.40 after Citigroup downgraded the stock from Buy to Neutral. Target price was dropped to $225 from $270.
EquityClock's Daily Comment
Headline reads "Stocks fall despite a goldilocks employment report".
http://www.equityclock.com/2022/09/03/stock-market-outlook-for-september-6-2022/
The Bottom Line
Last week North American equity indices continued to respond to Federal Reserve Chairman Powell's Jackson Hole Conference speech on August 26th. Monetary policy in the U.S. will continue to tighten until the U.S. inflation rate trends toward a 2% rate. The Federal Reserve's focus on the core PCE Price Index as its primary measure started to show promise when the Index slipped in July from 4.7% to 4.6% when reported on August 26th. However, several members of the FOMC stated publicly last week that more evidence of a downtrend is needed before a change in its tightening policy can occur. Focus has started to turn toward results of the next FOMC meeting on September 21st when the Fed Fund Rate is expected to increase by at least another 0.50% and possibly by another 0.75%. Current range for the Fed Fund Rate is 2.25%-2.50%.
U.S. equity indices are following their historic performance for years ending in "2" implying weakness from late August to early October followed by strength to at least the end of the year. Note that years ending in "2" also were mid-term U.S Presidential election years.
Consensus for Earnings and Revenues for S&P 500 Companies
Analysts have lowered earnings and revenue estimates significantly since our last report on August 8th. According to www.factset.com third quarter earnings are expected to increase 3.8% (versus previous estimate at 5.8%) and revenues are expected to increase 8.8% (versus previous estimate at 9.1%). Fourth quarter earnings are expected to increase 4.9% (versus previous estimate at 6.5%) and revenues are expected to increase 6.5% (versus previous estimate at 6.7%). Earnings for all of 2022 are expected to increase 7.9% (versus previous estimate at 8.9%) and revenues are expected to increase 10.8% (versus previous estimate at 11.0%.
Economic News This Week
August ISM Non-Manufacturing ISM released at 10:00 AM EDT on Tuesday is expected to dip to 55.5 from 56.7 in July.
July U.S. Trade Deficit released at 8:30 AM EDT on Wednesday is expected to drop to $70.5 billion from $79.60 billion in June.
Canada's July Merchandise Trade released at 8:30 AM EDT on Wednesday is expected to slip to a surplus of $3.50 billion from $5.05 billion in June.
Bank of Canada releases a statement on the Canadian economy at 10:00 AM EDT on Wednesday. The Overnight Lending Rate to Canada's major banks is expected to increase from 2.50% to 3.25%.
Beige Book is released at 2:00 PM EDT on Wednesday
European Central Bank's lending rate to major banks released at 8:30 AM EDT on Thursday is expected to increase to 1.00% from 0.50%.
Canada's August Employment released at 8:30 AM EDT on Friday is expected to increase 15,000 versus a decline of 30,600 in July. August Unemployment Rate is expected to increase to 5.0% from 4.9% in July.
Selected Earnings News This Week
Nil
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for September 2nd 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for September 2nd 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for September 2nd 2021
Green: Increase from previous day
Red: Decrease from previous day
Technical Notes for Friday
Hong Kong iShares moved below $20.18 extending an intermediate downtrend.
Links offered by valued providers
Mark Leibovit asks "Is short term stock market rally likely"?
Is Short Term Stock Market Rally Likely? - HoweStreet
Michael Campbell's Money Talks for September 3rd 2022
September 3rd Episode (mikesmoneytalks.ca)
Greg Schnell asks "Down 13%: Is it over now"?
Down 13%; Is It Over Now? | The Canadian Technician | StockCharts.com
David Keller says "As goes NVDA, so goes the market".
As Goes NVDA, So Goes the Market | The Mindful Investor | StockCharts.com
Mary Ellen McGonagle says "Negative bias remains ahead of holiday weekend"
https://www.youtube.com/watch?v=yX32JPmRpPc
Bruce Fraser says "Fall into September with seasonality".
Fall Into September With Seasonality | Bruce Fraser | Power Charting (09.02.22) - YouTube
Stansbury Research says "Summer is ending. Our experts are calling for a big fall"
Summer Is Ending… Our Experts Are Forecasting a Big Fall - YouTube
Links offered by Mark Bunting and www.uncommonsenseinvestor.com
Holding On to "Big, Wonderful" Multi-Baggers During a Bear Market – Uncommon Sense Investor
Victor Adair's Trading Notes for September 3rd
Trading Desk Notes For September 3, 2022 - HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.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
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 8.80 on Friday and plunged 29.00 last week to 35.60. It changed from Overbought to Oversold on a drop below 40.00. Trend remains down.
The long term Barometer dropped 2.40 on Friday and fell 6.80 last week to 27.80. It remains Oversold. Trend remains down.
TSX Momentum Barometers
The intermediate term Barometer added 1.68 on Friday, but dropped 23.95 last week to 43.70. It changed from Overbought to Neutral on a drop below 60.00. Trend remains down.
The long term Barometer slipped 0.84 on Friday and dropped 6.31 last week to 31.09. It remains Oversold. Trend remains 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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