Pre-opening Comments for Thursday December 15th
U.S. equity index futures at 7:30 AM EST were lower this morning. S&P 500 futures were down 39 points in pre-opening trade.
Lots of U.S. economic news is released this morning:
December Empire State Manufacturing Survey released at 8:30 AM EST is expected to drop 6.50% versus a gain of 4.50 in November.
December Philly Fed Index released at 8:30 AM EST is expected to improve to
-6.2 from -19.4 in November.
November U.S. Retail Sales released at 8:30 AM EST are expected to slip 0.1% versus a gain of 1.3% in October. Excluding auto sales, November U.S. Retail Sales are expected to increase 0.3% versus a gain of 1.3% in October.
November Capacity Utilization released at 9:15 AM EST is expected to slip to 79.8 from 79.9 in October. November Industrial Production is expected to slip 0.2% versus a slip of 0.1% in October.
October Business Inventories released at 10:00 AM EST are expected to increase 0.5% versus a gain of 0.4% in September.
Lennar dropped $2.17 to $88.65 after lowering fiscal first quarter guidance.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/12/clip_image0011-7.png "clip_image001[1]")
Novavax dropped $1.78 to $15.45 after proposing a $125 million share and convertible debt offering.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/12/clip_image0021-9.png "clip_image002[1]")
EquityClock’s Daily Comment
Headline reads “The period of seasonal strength for Oil began at the end of the last week and the trade is already off to a nice start”.
http://www.equityclock.com/2022/12/14/stock-market-outlook-for-december-15-2022/
Responses to the FOMC announcement at 2:00 PM EST
As expected, the Federal Reserve announced an increase in the Fed Fund Rate by 0.50% to 4.25%-4.50%. It also confirmed that more increases in the Fed Fund Rate are appropriate. Market responses after 2:00 PM EST were as follows:
S&P 500 Index initially moved lower, but recovered near the close
The U.S. Dollar ETN UUP initially moved higher, but closed virtually unchanged.
Long term bond prices moved higher
Financial stocks moved lower
Gold ETN moved lower, but closed near unchanged
Ditto for gold equities and related ETFs!
Technical Notes
Union Pacific $UNP an S&P 100 stock moved above $211.46 extending an intermediate uptrend.
Charter Communications $CHTR a NASDAQ 100 stock moved below$364.30 completing a double top pattern.
Couche Tard $ATD.TO a TSX 60 stock moved above $63.33 to an all-time high extending an intermediate uptrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for December 14th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for December 14th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for December 13th 2021
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Link offered by Mark Bunting and www.uncommonsenseinvestor.com
Look to Value, Bank & Energy Stocks to Weather a Mild Recession – Uncommon Sense Investor
Greg Schnell asks “Should we buy electric”?
Should We Buy Electric? | Greg Schnell, CMT | Market Buzz (12.14.22) – YouTube
Here comes Santa Claus!
North American equity markets have just entered their optimal time for the annual Santa Claus rally. The period lasts from closing index levels on December 14th to closing index levels on January 6th.
Frequency of gains and performance for North American equity indices are highest for the year during this three week period. Since 1990, the S&P 500 Index has recorded gains in 24 of the past 32 periods for a profit frequency rate of 80.0%. Average gain per period was 1.48%. Since 1990, the TSX Composite Index has recorded gains in 28 of the past 32 periods for a profit frequency rate of 87.5%. Average gain per period was 2.15%.
S&P 500 Momentum Barometers
The intermediate term Barometer slipped 3.20 to 79.40. It remains Overbought.
The long term Barometer slipped 3.20 to 60.80. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer slipped 2.12 to 65.68. It remains Overbought. A downtrend has started.
The long term Barometer slipped 1.69 to 49.58. 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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December 15th, 2022 at 8:16 am
An argument being made is that the Fed wanted to put out a very hawkish message to prevent any kind of new exuberant market run up and spending. The Fed wants the threat of higher rates to stop spending while knowing they may not actually in the end raise rates if their threats do the job. Its’ credibility in providing any kind of accurate guidance on future hikes is long gone after stating in late 2021 that there would be no hikes in 2022. In six weeks time further data will come in confirming that inflation is quickly plummeting and the Fed’s story will change.
December 15th, 2022 at 11:48 am
Inflation Right Now Is Negative. Siegal lays into the Fed. They will be cutting rates.
https://www.cnbc.com/video/2022/12/13/jeremy-siegel-if-fed-stopped-looking-at-stale-housing-data-theyd-realize-inflation-is-over.html
December 15th, 2022 at 12:50 pm
Inflation chart
https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/
December 15th, 2022 at 4:05 pm
Re 3 – YOY is all backward looking. Siegal’s point is that the 40% of CPI that shelter occupies is inaccurate. Still, the government’s CPI figures month over month peaked in June and was July 0.0, Aug 0.1, Sep 0.4, Oct 0.4, Nov 0.1. That means that in the last five months month over month inflation averaged 2.4% annualized. Once we get to June 2023 the YOY inflation rate will be sub 2.5% and could be sub 2%.
https://tradingeconomics.com/united-states/inflation-rate-mom
December 15th, 2022 at 10:09 pm
#4
A picture is worth a 1000 words. No assumed “story” needed………………..