Pre-opening Comments for Monday December 2nd
U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged at 8:30 AM EST.
Tesla added $5.77 to $350.90 after the company rolled out a new version of self-driving software.
Stellantis dropped $1.16 to $12.04 after Chief Executive Officer Carlos Tavares resigned.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/12/clip_image0021.png "clip_image002[1]")
Nvidia dropped $0.95 to $137.90 after the U.S. placed more curbs on China’s purchase on Nvidia’s microchips.
EquityClock’s Stock Market Outlook for December 2nd
The last month of the year is typically one of the strongest periods for stocks with the S&P 500 Index gaining an average of 1.2%, based on data from the past five decades. See:
https://equityclock.com/2024/11/30/stock-market-outlook-for-december-2-2024/
Technical Scoop for December 2nd from David Chapman and www.EnrichedInvesting.com
https://enrichedinvesting.com/library/
The Bottom Line
Focus this week is on fiscal fourth quarter results released by Canada’s largest banks.
Economic News This Week
October U.S. Construction Spending released at 10:00 AM EST on Monday is expected to increase 0.2% versus a 0.1% gain in September.
November ISM Manufacturing PMI released t 10:00 AM EST on Monday is expected to improve to 47.5 from 46.5 in October.
October U.S. Factory Order released at10:00 AM EST on Wednesday is expected to increase 0.4% versus a 0.5% decline in September.
November ISM Non-manufacturing PMI released at 10:00 AM EST on Wednesday is expected to drop to 55.5 from 56.0 in October.
Beige Book is scheduled for release at 2:00 PM EST on Wednesday
October U.S. Trade released at 8:30 AM EST on Thursday is expected to be a $78.8 deficit versus $84.4 billion deficit in September
October Canadian Trade released at 8:30 AM EST on Thursday is expected to be unchanged from September at a $1.26 billion deficit.
November U.S. Non-farm Payrolls released at 8:30 AM EST on Wednesday is expected to increase to 18,300 from 12,000 in October. November Unemployment Rate is expected to remain unchanged at 4.1%. November Average Hourly Earnings are expected to increase 0.3% versus a 0.4% gain in October.
November Canadian Employment Report is released at 8:30 AM EST on Friday.
December Michigan Sentiment is released at 10:00 AM EST on Friday.
Selected Earnings News This Week
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for November 29th 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 November 29th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for November 29th 2024
Green: Increase from previous day
Red: Decrease from previous day
Changes Last Week
Comments for Wolf and Jack: November 28th 2024
Don Vialoux was a guest on “Wolf on Bay Street” radio show taped last Thursday and released at 7:00 PM EST on Saturday on Corus Radio 640. Following are comments developed prior to the interview:
North American equity markets are following their traditional pattern following election of a new President of the United States: They have a history of moving higher from Election Day to Inauguration Day (scheduled this time on January 20th 2025). Investors are impressed by plans for changes proposed by the new President.
Taxation of security profits and losses are expected to have a significant impact on equity prices between now and mid- December. Most investors have seen the value of their equity portfolios increase significantly in 2024. A prudent strategy is to reduce taxable capital gains by liquidating equity positions before the end of the year that are trading at a loss and are no longer achieving reasons for their purchase. Investors have a history of concentrating liquidation of these securities during the first two weeks in December. Not surprising, the S&P 500 Index and the TSX Composite Index have a history of moving sideways during the first two week in December. This year, tax loss selling is expected to be less intense than usual because fewer equity securities are trading at a loss.
Traditionally, the Santa Claus rally in North American equity securities starts in mid-December and ends in the first week in January. Events triggering the Santa Claus rally during this time include:
· A drop in institutional equity activity and influence on equity markets during the extended holiday period
· An increase in individual equity activity. Individuals are in a hopeful and joyous mood during the holiday. They are significant buyers/not sellers of equity positions
· Receipt by individuals of annual bonuses either just before or just after the holiday season: Bonuses frequently are invested into equity markets. In Canada, annual bonuses also are a prominent source for funding of contributions into Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TSFAs).
· Release of “bullish” investment research reports by investment dealers who offer their “top picks for the following year”.
Look out for the “speed bump” for U.S. equity prices after the first week in January 2025! Many investors have significant unrealized equity profits from gains recorded in 2024. They will defer their tax liability by waiting to take trading profits in the New Year. U.S. equity indices have a history of moving flat to slightly lower from early January to mid-March partially due to tax profiting reasons. The dip in U.S. equity prices during this period is particularly notable in the year after a U.S. President is elected: Investors, who were encouraged by promises made by the President before his Inauguration, become less enthusiastic when they discover how the promises are to be fulfilled. Implementation of President elect Trump’s proposals starting in the third week in January following the Inauguration could be interesting. Old Chinese says “May you live in interesting times”!
Note that the Canadian equity market has a history of outperforming broadly based U.S. equity indices during the early January/mid-March period. That’s when Canadian investors annually focus on contributing to their RRSP and TFSA plans. Most contributions subsequently are invested into the Canadian equity market, triggering strength in Canadian equity prices.
Links offered by valued providers
Michael Campbell’s Money Talks for November 30th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Financials on Fire: Understanding Valuations and Market Signals: Guy Adami, Dan Nathan and Danny Moses
Financials on Fire: Understanding Valuations and Market Signals – YouTube
S&P ‘493’ will do increasingly well, says Yardeni Research president
S&P ‘493’ will do increasingly well, says Yardeni Research president – YouTube
3 Buys and a Bail: Walmart, Apple, Tesla & Cheniere Energy
3 Buys and a Bail: Walmart, Apple, Tesla & Cheniere Energy – YouTube
Here’s Why the Small Cap IWM Will Soar Nearly 70% by the End of 2025: Tom Bowley
Plunge in Treasury Yields Triggers Gap-Surge in Home Builders: Arthur Hill
Plunge in Treasury Yields Triggers Gap-Surge in Home Builders | Art’s Charts | StockCharts.com
AI Sucking the Power Grid Dry: Bob Hoye
AI Sucking the Power Grid Dry – HoweStreet
Trading Desk Notes for November 30, 2024; Victor Adair
Trading Desk Notes for November 30, 2024 – HoweStreet
Crude Oil Retreats US$2/b On Israel/Hezbollah Ceasefire: Josef Schachter
Crude Oil Retreats US$2/b On Israel/Hezbollah Ceasefire. – HoweStreet
Cryptocurrencies, Gold, Oil, Cannabis, Uranium: Ross Clark, Rick Ackerman, Mark Leibovit
This Week in Money – HoweStreet
Technical Notes
Brazil iShares $EWZ moved below $26.23 completing a long term Head & Shoulders pattern.
Weakness in Brazil iShares was triggered with a breakdown by VALE on a move below $8.66 to a three year low.
MasterCard $MA an S&P 100 stock moved above $534.03 to an all-time high extending an intermediate uptrend.
Shopify $SHOP.TO a TSX 60 stock moved above $Cdn161.86 to a three year high extending an intermediate uptrend.
S&P 500 Momentum Barometers
The intermediate term Barometer added 1.40 to 71.00 on Friday and gained 7.80 last week to 71.00. It remains Overbought. Daily uptrend was extended on Friday.
The long term Barometer added 0.20 on Friday and gained 3.80 last week. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer added 5.02 on Friday and added 0.91 last week to 64.84. It remains Overbought.
The long term Barometer was unchanged on Friday and last week at 75.34. 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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December 1st, 2024 at 7:44 pm
This week is an important week for the Canadian Big Six banks. It will be an inflection point.
BNS will be reporting Tuesday 1st on Dec 3rd
RY and Na are reporting on Dec 4th
TD, BMO and CM will report on Dec 5th
LB on Dec 6th
CWB on Dec 13th
December 2nd, 2024 at 9:30 am
December and January trading – Tax loss selling will be less which is great. People sitting on large gains may be tempted to hit the sell button to harvest some gains as we enter the new calendar/taxation year if there is a sense that the market is overvalued and perhaps if there is some concern about Trump’s actions when he enters office. I’m not saying that this will happen but I am thinking about it.
December 2nd, 2024 at 11:52 am
It will be interesting to see how markets play out over the next couple weeks. Been a great year so in theory tax loss selling should be minimized, but as Larry points out there could be a group concerned with valuation that just hits the sell button. Hoping the banks get a bump this week on reporting.