Pre-opening Comments for Monday March 4^th

U.S. equity index futures were lower this morning. S&P 500 futures were down 10 points at 8:30 AM EST.

Apple dropped $1.46 to $178.20 after European regulators issued a 1.8 Euro fine related to its Apple Music service. Apple plans to appeal.

Decker gained $42.70 to $945.99 on news that the stock will join the S&P 500 Index on March 18^th

Whirlpool dropped $1.67 to $105.14 on news that the stock will be replaced in the S&P 500 Index on March 18^th

Macy’s added $3.13 to $21.14 after an offer to buy the company was raised from $21 to $24 per share

 

The Bottom Line

U.S. equity indices were mixed last week: S&P 500 Index and NASDAQ Composite Index recorded small gains while the Dow Jones Industrial Average and Dow Jones Transportation Average recorded small losses.

The NASDAQ Composite Index led the advance by broadly based U.S. equity indices last week. Most of the gain was recorded by the “Fabulous Four” technology stocks (i.e. Amazon.com, Microsoft, Meta Platforms and Nvidia). Other big cap stocks faltered, notably Apple and Alphabet when they completed double top patterns.

Be careful when proclaiming the NASDAQ Composite Index as “the best way to measure performance of U.S. equity indices”. The Composite Index mainly consists of hundreds of small and mid-cap stocks as well as a small number of big cap stocks. As noted by Carter Worth on CNBC on Friday, favourable performance of the Composite Index relative to the S&P 500 Index and Dow Jones Industrial Average is determined primarily by performance of the top 100 stocks in the Composite Index (i.e. the basket of securities that are part of the NASDAQ 100 Index). Performance of the NASDAQ Composite Index relative to the NASDAQ 100 Index during the past 20 years has consistently been negative. The NASDAQ 100 Index is the backing for the ETF: QQQ.

 

Consensus for Earnings and Revenues for S&P 500 Companies

Source: www.FactSet.com

Analysts substantially adjusted fourth quarter 2023 earnings estimates higher during the past five weeks. With 97% of S&P 500 companies reported to date, consensus calls for a 4.0% increase on a year-over-year basis (versus an estimated 1.4% decrease on January 26^th). In addition, consensus for fourth quarter revenues calls for a 4.2% increase (versus an estimated increase of 3.2% on January 26^th). Most of the additional gains came from higher than consensus results released by the “Fabulous Four” companies (i.e. Microsoft, Alphabet, Meta Platforms and Nvidia)..

Analysts slightly reduced earnings estimates for the first quarter of 2024. Consensus on a year-over-year basis calls for an earnings increase of 3.6% (versus an increase two weeks ago of 3.9%). Revenues are expected to increase of 3.6% (versus a previous 3.9% increase).

Earnings gains accelerate thereafter to the end of 2024. Consensus for the second quarter calls for a 9.2% earnings increase (versus a previous 9.0% increase) and a 4.7% increase in revenues (versus a previous 4.6% increase). Consensus for the third quarter calls for an 8.3% increase in earnings (versus a previous 8.0% increase) and a 5.1% increase in revenues (versus a previous 5.0% increase). Consensus for the fourth quarter calls for a 17.4% increase in earnings (versus a previous 17.6% increase) and a 5.7% increase in revenues. For all of 2024, consensus calls for an 11.0% increase in earnings (versus a previous 10.9% increase) and a 5.0% increase in revenues (versus a previous 5.4% increase)

 

Economic News This Week

Source: www.Investing.com

January U.S. Factory Orders are released at 10:00 AM EST on Tuesday

February ISM Non-manufacturing PMI at 10:00 AM EST on Tuesday is expected to slip to 53.3 from 53.4 in January.

Bank of Canada statement on the Bank Rate offered to major Canadian banks is released at 9:45 AM EST on Wednesday. Press conference is offered at 10:30 AM EST. No change in the lending rate at 5.00% for major Canadian banks is expected.

Federal Reserve Chairman Powell testifies at 10:00 AM EST on Wednesday

Beige Book is released at 2:00 PM EST on Wednesday

European Central Bank decision on interest rates released at 8:15 AM EST on Thursday is expected to maintain its lending rate to major banks at 4.50%.

January U.S. Trade released at 8:30 AM EST on Thursday is expected to ease to a deficit of $61.70 billion from a deficit of $61.20 billion in December

January Canadian Trade Balance is released at 8:30 AM EST on Thursday

February Non-farm Payrolls released at 8:30 AM EST on Friday is expected to drop to 188,000 from 353,000 in January. February Unemployment Rate is expected to remain unchanged from January at 4.7%. February Hourly Earnings are expected to increase 0.2% versus a gain of 0.6% in January.

February Canadian Employment Change is released at 8:30 AM EST on Friday.

 

Selected Earnings News This Week

Source: www.Investing.com

 

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for March 1^st 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 March 1^st 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for March 1^st 2024

Green: Increase from previous day

Red: Decrease from previous day

 

Links offered by valued providers

Michael Campbell’s Money Talks for March 2^nd

March 2nd Episode (mikesmoneytalks.ca)

 

AMD Spikes Higher as AI Trade Still Kicking: David Keller

AMD Spikes Higher as AI Trade Still Kicking – YouTube

 

Hightower’s Stephanie Link on her top stock picks: There’s a lot to do beyond tech

Hightower’s Stephanie Link on her top stock picks: There’s a lot to do beyond tech – YouTube

 

TOP ETFs for Explosive Growth: Mish Schneider

TOP ETFs for Explosive Growth – YouTube

 

Small Caps Join The Party — Here’s a Top Stock to Consider: Mary Ellen McGonagle

Small Caps Join The Party — Here’s a Top Stock to Consider | The MEM Edge | StockCharts.com

 

Are "The Seven" Still Magnificent? Carl Swenlin

Are "The Seven" Still Magnificent? | DecisionPoint | StockCharts.com

 

Evaluating Risk is a Key Difference Between Successful and Unsuccessful Traders

Tom Bowley

Evaluating Risk is a Key Difference Between Successful and Unsuccessful Traders | Trading Places with Tom Bowley | StockCharts.com

 

Jim Cramer looks ahead to next week’s market game plan

Jim Cramer looks ahead to next week’s market game plan – YouTube

 

Gold to Bitcoin Portfolio Ratio: Bob Hoye

Gold to Bitcoin Portfolio Ratio – HoweStreet

 

Ross Clark and Mark Leibovit: Gold and Bitcoin

This Week in Money – HoweStreet

 

Trading Desk Notes: Victor Adair

Trading Desk Notes For March 2, 2024 – HoweStreet

 

OPEC Discussing Extending Its Production Cuts For One More Quarter Lifts Crude Prices Modestly: Josef Schachter

OPEC Discussing Extending Its Production Cuts For One More Quarter Lifts Crude Prices Modestly – HoweStreet

 

 

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

OPEC+ countries are considering an extension of previous cuts, which amount to 2.2M bbl/day, into Q2 and possibly to the end of the year, Reuters reported, adding that a decision is expected in the first week of March.

Energy SPDRs $XLE moved above $87.11 extending an intermediate uptrend. Responding to a breakout by WTI crude oil prices higher above US$79.29 and US$79.60 per barrel.

Oil and Gas Exploration SPDRs $XOP moved above $153.62 extending an intermediate uptrend.

BMO Equal Weight Canadian Energy ETF $ZEO moved above Cdm$67.63 to an all-time high extending an intermediate uptrend.

Industrial Commodities iShares $GSG moved above $21.26 and $21.30 extending an intermediate uptrend (includes a 55% weight in energy commodities).

First Trust Auto ETF $CARZ moved above $57.75 and $59.20 extending an intermediate uptrend.

BMO Emerging Markets ETF $ZEM.TO moved above Cdn$19.62 extending an intermediate uptrend.

Apple $AAPL a NASDAQ 100 stock moved below $179.02 completing a double top pattern

UnitedHealth Group $UNH a Dow Jones Industrial Average stock moved below $479.00 extending an intermediate downtrend.

 

S&P 500 Momentum Barometers

The intermediate term Barometer added 1.60 on Friday and gained 1.60 last week to 69.20. It remains Overbought.

The long term Barometer slipped 0.80 on Friday and dropped 1.00 last week to 75.60. It remains Overbought

 

TSX Momentum Barometers

The intermediate term Barometer advanced 8.89 on Friday and gained 8.88 last week to 60.44. It changed from Neutral to Overbought on a move above 60.00.

The long term Barometer advanced 5.78 on Friday and gained 5.78 last week to 64.00. It changed from Neutral to Overbought on a move above 60.00.

 

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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