Pre-opening Comments for Monday July 22nd
U.S. equity index futures were higher this morning. S&P 500 futures were up 37 points at 8:30 AM EDT.
CrowdStrike dropped another $12.73 to $292.23 after Guggenheim downgraded the stock from Buy to Neutral.
Air Canada is expected to open lower after the company trimmed its full year guidance.
![clip_image002[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0025-3.png "clip_image002[5]")
Verizon slipped $0.45 to $41.62 after reporting second quarter earnings below consensus.
Nvidia added $2.33 to $120.25 after announcing plans for a new China chip that will comply with U.S. regulation.
![clip_image004[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0045-3.png "clip_image004[5]")
EquityClock’s Stock Market Outlook for July 22nd
Ratio of High-Beta versus Low Volatility testing long-term horizontal resistance, a critical juncture for risk sentiment in this market. See:
https://equityclock.com/2024/07/20/stock-market-outlook-for-july-22-2024/
The Bottom Line
North American equity markets experienced substantial rotation last week: Out of the technology sector and into other economic sensitive sectors such as Transportation, Banks and Biotech.
Second quarter results released to date have been significantly higher than consensus. According to www.FactSet.com 80% of reporting S&P 500 companies released a positive earnings surprise and 65% reported a positive revenue surprise.
Economic focus this week is on the June Core PCE Price Index released at 8:30 AM EDT on Friday. Extension of a year-over-year downtrend by this Index will trigger renewed buying in North American equities. Consensus calls for a gain of 0.2% in June versus a gain of 0.1% in May, but a decline from a gain of 0.9% last June.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Changes since our last full report on July 8th have been slight. Fourteen percent of companies have reported second quarter results to date. Consensus for second quarter earnings increased to a 9.7% gain (versus a previous 8.8% gain) and consensus for second quarter revenues increased to a 4.9% gain (versus a previous 4.6% gain). Consensus for the third quarter earnings calls for a 7.7% increase (versus a previous 8.1% increase) and a 5.5% revenue increase (versus a previous 4.9% increase).
Earnings gains accelerate further in the fourth quarter. Consensus calls for a 17.0% increase in earnings (versus a previous 17.3% increase) and a 5.5% increase in revenues (versus a previous 5.6% increase).
For all of 2024, consensus calls for an 11.0% earnings increase (versus previous 11.3% increase) and a5.0% revenue increase.
Earnings gains remain elevated in 2025. First quarter earnings are expected to increase
15.1 % on a year-over-year basis (versus previous 15.2% increase) and revenues are expected to increase 5.7% (versus 5.9% increase). Second quarter earnings are expected to increase 14.5% (versus previous 15.6% increase) and revenues are expected to increase 5.9%. For all of 2025 earnings are expected to increase 14.7% (versus previous 14.4% increase) and revenues are expected to increase 6.0%.
Economic News This Week
Source: www.Investing.com
June U.S. Existing Home Sales released at 8:30 AM EDT on Tuesday are expected to ease to 4.00 million units from 4.11 million units in May.
Bank of Canada’s Monetary Policy Report is released at 9:45 AM EDT on Wednesday. A press conference is offered at 10:30 AM EDT. Bank of Canada’s lending rate to major Canadian banks is expected to remain unchanged at 4.75%.
June U.S. June New Home Sales released at 10:00 AM EDT on Wednesday are expected to increase to 640,000 from 619,000 in May.
June Durable Goods Orders released at 8:30 AM EDT on Thursday are expected to increase 0.3% versus a gain of 0.1% in May.
First estimate of second quarter annualized real GDP released at 8:30 AM EDT on Thursday is expected to grow at a 2.0% rate versus a 1.4% rate in the first quarter
June PCE Price Index released at 8:30 AM EDT on Friday is expected to increase 0.1% versus no change in May. June Core June PCE Price Index is expected to increase 0.2% versus a gain of 0.1% in May.
June Personal Income released at 8:30 AM EDT on Friday is expected to increase 0.4% versus a gain of 0.5% in May. June Personal Spending is expected to increase 0.3% versus a gain of 0.2% in May.
July Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to drop to 66.0 from 68.2 in June.
Selected Earnings News This Week
Source: www.Investing.com
Another 138 S&P 500 companies are scheduled to report quarterly results this week (including seven 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 July 19th 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 July 19th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for July 19th 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
Links Offered by Valued Providers
Are the Latest Stock Market Bumps Manipulation? Mark Leibovit
Are the Latest Stock Market Bumps Manipulation? – HoweStreet
VIX SPIKES! Is a Market Correction Coming? David Keller
VIX SPIKES! Is a Market Correction Coming? – YouTube
Liz Ann Sonders Reveals Second Half Outlook For Stock Market
Liz Ann Sonders Reveals Second Half Outlook For Stock Market – YouTube
Impact of possible U.S. trade tensions on Canada
Impact of possible U.S. trade tensions on Canada – YouTube
Hindenburg Omen: The Truth, Effects, and Duration (2024): David Keller
Hindenburg Omen: The Truth, Effects, and Duration (2024) – YouTube
Michael Campbell’s Money Talk for July 20th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Why Short Term Rates Should Be Your Nightmare: Bob Hoye
Why Short Term Rates Should Be Your Nightmare – HoweStreet
Trading Desk notes for July 20th : Victor Adair
Trading Desk Notes For July 20, 2024 – HoweStreet
US Total Stocks Rose 11.1 MB Last Week -This Should Put Pressure on Crude Prices
Josef Schachter
US Total Stocks Rose 11.1 MB Last Week -This Should Put Pressure on Crude Prices – HoweStreet
Technical Scoop from David Chapman www.EnrichedInvesting.com for July 22nd
Technical Notes
Base metal equity ETFs $PICK, $XBM.TO and $COPX completed double top patterns on moves below intermediate support.
China large cap iShares $FXI moved below $25.87 setting an intermediate downtrend.
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 5.20 on Friday and fell 5.0 last week to 65.20. It remains Overbought.
The long term Barometer dropped 1.80 on Friday, but added 0.20 last week to 75.00. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer dropped 1.77 on Friday and fell 5.31 last week to 74.34. It remains Overbought.
The long term Barometer slipped 0.89 on Friday, but gained 2.22 last week to 81.42. 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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July 22nd, 2024 at 11:00 am
TD.to is approaching price resistance (double top) of $80.72.The RSI 8 is very overbought as well. The Seasonality trend is flat but improves from August onward. The TD.to:ZEB.to chart which is a TD.TO comparison to the Equal Weight bank stock symbol ZEB.TO has been weak since last December but has been improving since mid June.
https://stockcharts.com/h-sc/ui?s=TD.TO&p=D&yr=2&mn=0&dy=0&id=p39920928735&a=1725113757
https://stockcharts.com/freecharts/seasonality.php?symbol=TD.TO
July 22nd, 2024 at 4:58 pm
Ron/BC
RE Canadian Banks: Since you sent the seasonality chart of TD, I was wondering if you saw that according to Equity Clock – link above, ZEB.TO and ZWB.TO are on the list of stocks entering their period of seasonal strength today. I don’t always look at this link – just happened to click the link today because this topic got my attention:
“Ratio of High-Beta versus Low Volatility testing long-term horizontal resistance, a critical juncture for risk sentiment in this market.”
Of course, you can’t read it if you are not a subscriber so I tried creating my own version, using your chart format but I did not add any annotations.
https://schrts.co/zvMTVGMh
July 22nd, 2024 at 8:56 pm
Paula
The STockcharts Seasonality show the banks strength rising from August through December. I don’t fully understand what your chart is saying. Is it that the overall risk factor is rising?
Just got my new computer today and believe it or not I’ve got it actually working!!!! (except for the printer,lol.)