Pre-opening Comments for Thursday May 25^th

U.S. equity index futures were higher this morning. S&P 500 futures were up 27 points at 8:35 AM EDT.

Index futures eased slightly after 8:30 AM EDT following release of second estimate of first quarter annualized U.S. GDP. Consensus was unchanged growth at 1.1%. Actual was growth at 1.3%.

Fitch lowered its U.S. Credit Rating from AAA to AAA negative watch.

Nvidia jumped $56.87 to $362.25 after guiding to higher than consensus second quarter results.

Snowflake dropped $22.27 to $154.97 after guiding to lower than consensus estimates.

BMO Equal Weight Canadian Bank ETF (ZEB.TO $33.12) is expected to open lower after Royal Bank and Commerce Bank reported less than consensus fiscal second quarter earnings. Both banks raised their loan loss provision.

Splunk added $9.81 to $100.50 after reporting higher than consensus first quarter results.

 

EquityClock’s Daily Comment

Headline reads “Small-cap valuations are around the lowest level in the past two decades and seasonal tendencies are favourable for the group over the next month and a half, but, yet, buying demand remains absent”.

http://www.equityclock.com/2023/05/24/stock-market-outlook-for-may-25-2023/

Technical Notes

China Large Cap iShares $FXI moved below $26.99 extending an intermediate downtrend.

JD Inc. $JD a Chinese based company and NASDAQ 100 stock moved below $33.53 extending an intermediate downtrend.

Base metals equities and ETFs moved below support extending intermediate downtrends. They responded to a 2.54% drop in spot copper prices. Global Metals iShares PICK moved below $38.76 completing a Head & Shoulders pattern, BHP moved below $56.48, VALE moved below $13.25, Southern Copper SCCO moved below $65.63 and HudBay Minerals moved below $Cdn5.89.

Steel ETF $SLX moved below $57.29 extending an intermediate downtrend.

Retail SPDRs $XRT moved below $58.97 extending an intermediate uptrend.

S&P 100 stocks moving below intermediate support included Morgan Stanley $MS, Visa $V and American Tower $AMT

NASDAQ 100 stocks moving below intermediate support included Analog Devices $ADI, Fiserv $FISV

Canadian bank stocks were under pressure after Bank of Montreal and Scotia Bank reported lower fiscal second quarter earnings (related to larger than expected loan loss provisions). BMO Equal Weight Bank ETF $ZEB.TO moved below intermediate support at $33.19. Royal Bank $RY.TO moved below $124.10 completing a Head & Shoulders pattern.

Railway stocks on both sides of the border were notably weaker. Transportation Average iShares dropped 1.8%. Canadian Pacific $CP.TO a TSX 60 stock moved below support at $103.83. Canadian National Railway $CNR.TO at TSX 60 stock moved below support at $153.80 completing a double top pattern.

 

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for May 24^th 2023

Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for May 24^th 2023

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for May 24^th 2023

Green: Increase from previous day

Red: Decrease from previous day

Source for positive seasonal ratings: www.equityclock.com

 

Technical Chart of the Day

The technology sector and related ETFs currently are leading U.S. equity markets. Blowout news from Nvidia after the close last night will further enhance its lead. Technical score for Technology SPDRs currently is 4 and likely will increase to 6 today.

 

Intermediate trend: up Score: 2

Strength relative to S&P 500: Positive: Score: 2

Trades above its 20 day moving average: Score: 1

Daily momentum (Stochastics, RSI, MACD): Down Score: -1

Total score (2+2+1-1) = 4 4

 

S&P 500 Momentum Barometers

The intermediate term Barometer plunged 9.80 to 33.20. It changed from Neutral to Oversold on a drop below 40.00. Daily trend has turned down.

The long term Barometer dropped 4.40 to 43.00. It remained Neutral. Daily trend has turned down.

 

TSX Momentum Barometers

The intermediate term Barometer dropped 6.90 to 40.09. It remains Neutral. Daily trend is down.

The long term Barometer dropped 4.74 to 50.86. It remains Neutral. 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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