Pre-opening Comments for Monday January 29th
U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged at 8:30 AM EST.
SoFi Technologies added $0.56 to $8.18 after reporting higher than consensus quarterly earnings.
Boeing gained $2.05 to $207.52 after its 737 Max 9 aircraft resumed service.
![clip_image002[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/01/clip_image0025-8.png "clip_image002[5]")
American Airlines added $0.22 to $15.35 after Citigroup upgraded the stock from Neutral to Buy.
The Bottom Line
Responses to fourth quarter results released last week by S&P 500 companies were mixed with important exceptions. Notable were responses to reports by key technology companies: Strongest positive responses were recorded by Microsoft, ASML, IBM, Netflix and Lam Research. Strongest negative responses were recorded by Texas Instruments, Tesla, Intel and Visa.
Once again, the “Super Six” technology stocks (Tesla figuratively was booted out of the “Magnificent Seven” last week). led the advance the S&P 500 Index to an all-time high. Once again, the equal weight S&P 500 Index and its related ETF: RSP failed to reach an all-time high set three years ago.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Analysts slightly raised fourth quarter 2023 earnings and revenue estimates last week, but once again lowered their outlook for accelerating earnings and revenue gains in 2024.
Earnings estimates for the fourth quarter of 2023 were increased slightly last week . Fourth quarter earnings are expected to decrease 1.4% on a year-over-year basis (versus decrease last week of 1.7%). Estimate for fourth quarter revenues was increased to a gain of 3.2% from a gain of 2.2% 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 4.6 % (versus previous increase of 5.4%) 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 9.4% earnings increase (versus previous 10.0% increase last week) and a 4.7% increase in revenues (versus previous 4.9% increase). Consensus for the third quarter calls for a 7.7% increase in earnings (versus previous 82% increase) and a 4.9% increase in revenues (versus a 5.2% increase last week). Consensus for the fourth quarter calls for a 21.3% increase in earnings (versus previous 22.1% increase) and a 5.6% increase in revenues (versus previous 5.9% increase). For all of 2024, consensus calls for an 11.62% increase in earnings (versus previous 12.2% increase) and a 5.4% increase in revenues (versus previous 5.5% increase)
Economic News This Week
Source: www.Investing.com
Canadian November GDP released at 8:30 AM EST on Wednesday is expected to increase 0.1% versus no change in October.
January Chicago Purchasing Managers Index released at 9:45 AM EST on Wednesday is expected to improve to 47.0 from 46.9 in December.
FOMC Interest Rate Announcement released at 2:00 PM EST on Wednesday. No change in the Fed Fund Rate at 5.25%-5.50% is expected. Press conference is offered at 2:30 PM EST
Fourth quarter Non-farm Productivity is released at 8:30 AM EST on Thursday
December U.S. Construction Spending released at 10:00 AM EST on Thursday is expected to increase 0.5% versus a gain of 0.4% in November.
December ISM Manufacturing Purchasing Managers Index released at 10:00 AM EST on Thursday is expected to remain unchanged from November at 47.4.
January Non-farm Payrolls released at 8:30 AM on Friday are expected to drop to 162,000 from 216,000 in December. January Unemployment Rate is expected to remain unchanged from December at 3.7%. January Average Hourly Earnings are expected to increase 0.3% versus a gain of 0.4% in December.
December U.S. Factory Orders are released at 10:00 AM EST on Friday
February Michigan Consumer Sentiment released at 10:00 AM EST on Friday is expected to increase to 78.8 from 69.7 in January.
Selected Earnings News This Week
Source: www.Investing.com
Twenty five percent of S&P 500 companies have reported quarterly earnings to date. Another 106 S&P 500 companies are scheduled to report this week (including six Dow Jones Industrial Average companies). Five TSX 60 companies are scheduled to report.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Jan.26th 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 26th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for Jan.26th 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
S&P 500 Index as a U.S. stock market benchmark?
Media headline last week highlighted “U.S. equity markets reach an all-time high”. The headline referred primarily to the S&P 500 Index that closed at 4,890.97 on Friday. Is the S&P 500 Index a legitimate measure of the performance by U.S. equity markets? Did U.S. equity markets actually reach an all-time high? Is a better Index available to measure U.S. equity market performance?
Background: The S&P 500 Index has been the best known benchmark for U.S. equity performance since 1950. It is the most reported Index by the media and is the most frequent measure used by the investment community to measure relative portfolio performance. Honorable mention as a benchmark is the Dow Jones Industrial Average, a price weighted average based on the performance of 30 large cap U.S. listed equities.
Using the S&P 500 Index as a benchmark has come under scrutiny during the past two year: The Index is capitalization weighted: Net result, seven of the 500 equities frequently called “The Magnificent Seven” have progressively increased their weight in the Index to near 25% where their weight is having an overbalanced impact on its performance. All of “The Magnificent Seven” are Technology stocks.
Impact of the overbalance has been notable during the past year and the past month: In 2023, the S&P 500 Index advanced 24.23% while the Equal Weight S&P 500 ETF (Symbol: RSP).gained 13.88%. From December 29th to January 26th, the S&P Index has gained 2.54% while RSP has declined 0.19%.
Not surprising, very few investors and active fund managers outperformed the S&P 500 Index last year. Moreover, recent media highlights of “all-time record highs by U.S. equity markets” last week at best were misguided. A more accurate measure of performance by U.S. equity markets in the Equal Weight S&P 500 Index and its related ETF (Symbol: RSP)
Links offered by valued providers
Unlocking the Power of Technical Indicators: David Keller
Unlocking the Power of Technical Indicators – YouTube
Stock Market Hits New Highs, Now What? | On The Tape Investing Podcast: Guy Adami
Stock Market Hits New Highs, Now What? | On The Tape Investing Podcast – YouTube
Mastering the “Pruden Model”: IBM Case Study
Mastering the “Pruden Model”: IBM Case Study – YouTube
Mike’s Money Talks for Janury27th
https://mikesmoneytalks.ca/category/mikes-content/complete-show/
Market Uptrend Endures Ahead Of BIG Earnings Next Week! Mary Ellen McGonagle
https://www.youtube.com/watch?v=pWggt-fEJ3w&t=121s
How to Avoid Huge Drawdowns From High Flying Stocks: David Keller
https://www.youtube.com/watch?v=Ds0i_Wov4ho
Is This a Break Out or a Pull Back? TG Watkins
https://www.youtube.com/watch?v=kw1u3ZkiD9Y
Could Lower Interest Rates Boost The Stock Market? Bob Hoye
Could Lower Interest Rates Boost The Stock Market? – HoweStreet
China Prohibits Shorting Stocks: Mark Leibovit
China Prohibits Shorting Stocks – HoweStreet
Trading Desk Notes For January 27, 2024: Victor Adair
Trading Desk Notes For January 27, 2024 – HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.com
Technical Notes for Friday
American Express $AXP a Dow Jones Industrial Average stock moved above $189.51 extending an intermediate uptrend.
Capital One Financial $COF an S&P 100 stock moved above $134.26 extending an intermediate uptrend.
CSX $CSX a NASDAQ 100 stock moved above $35.07 extending an intermediate uptrend.
Intel $INTC a Dow Jones Industrial Average stock moved below $45.24 completing a double top pattern.
S&P 500 Momentum Barometers
The intermediate term Barometer slipped 1.80 on Friday, but added 1.20 last week to 76.60. It remains Overbought. Daily trend is down.
The long term Barometer added 1.20 on Friday and gained 2.60 last week. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer slipped 2.22 on Friday, and eased 1.47 last week to 69.33. It remains Overbought
The long term Barometer was unchanged on Friday, but dropped 9.47 last week to 61.23. It remains Overbought.
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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January 29th, 2024 at 12:05 pm
25 Worst stocks in Modern history list. The disaster list is much longer but these are just the top 25. Recall all the great stories about them over the years. So much for stock stories. But then there is a sucker born every minute they say.
https://www.visualcapitalist.com/the-25-worst-stocks-by-shareholder-wealth-losses-1926-2022/
January 29th, 2024 at 7:07 pm
https://www.cnbc.com/mad-money-soundboard/
Try the fourth button from the left middle row