Pre-opening Comments for Monday January 27^th

U.S. equity index futures were sharply lower this morning. S&P 500 futures dropped 120 points at 8:30 AM EST.

Leading the weakness were Artificial Intelligence stocks on concern that China’s DeepSeek has developed a lower cost technology. Nvidia plunged $17.06 to $125.75. Microsoft dropped $26.55 to $417.51

AT&T added $0.41 to $23.13 after reporting higher than consensus fourth quarter earnings.

Sofi Technologies plunged $2.80 to $15.12 after offering a lower than consensus outlook

Equity Clock – Market Outlook for January 27, 2025

Momentum in the market is waning as the technology sector loses its grip on investor portfolios. See:

https://equityclock.com/2025/01/24/stock-market-outlook-for-january-27-2025/

Technical Scoop for January 27^th from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/library/

The Bottom Line

Primary focus this week is on central bank news released on Wednesday. The Federal Reserve is expected to maintain its Fed Fund Rate at 4.50% and the Bank of Canada is expected to lower its lending rate to Canada’s major banks to 3.00% from 3.25%. Investors will be watching closely for guidance on the direction for future rate changes.

Fourth quarter earnings report season ramps up this week. Results released to date have exceeded consensus. Focuses this week are on reports released on Wednesday by Microsoft, Meta and IBM and on Thursday by Apple and Amazon.

Consensus for Earnings and Revenues for S&P 500 companies

Source: www.factset.com

Fourth quarter results released to date have been encouraging: 16% of S&P 500 companies have reported results: 80% have reported higher than consensus earnings and 62% have reported higher than consensus revenues. Better than consensus fourth quarter earnings results released last week prompted analysts to raise their fourth quarter earnings estimate to a 12.7% year-over-year increase, up from a previous 12.5% increase. Consensus for revenue gains slipped last week to 4.6%, down from a previous 4.7% increase.

For all of 2024, consensus calls for a 9.5% earnings increase (up from 9.4% last week) and a 4.9% revenue increase.

Analyst estimates for earnings and revenue gains for 2025 changed slightly last week. Consensus for first quarter earnings called for an 11.3 % increase on a year-over-year basis, down from an 11.6% increase last week. Consensus for first quarter revenues slipped to a 5.0% increase from a previous 5.1% increase. Consensus for second quarter earnings was unchanged with an 11.6% increase and consensus for second quarter revenues was unchanged with a 5.0% increase. Consensus for third quarter earnings calls for a 15.3% increase, up from a 15.2% increase last week. Consensus for third quarter revenues calls for a 5.6% increase, down from a previous 5.7% increase last week. Fourth quarter earnings are expected to increase 16.6%, down from a previous 16.7% increase. Fourth quarter revenues are expected to increase 6.7%.

For all of 2025 earnings are expected to increase 14.8% and revenues are expected to increase 5.9%.

Above average earnings gains are expected to continue into 2026, albeit at a slightly slower rate than the second half of 2025. Consensus calls for a 13.6% earnings increase and a 6.4% revenue increase.

Economic News This Week

December U.S. New Home Sales released at 10:00 AM EST on Monday are expected to increase to 670,000 units from 664,000 units in November.

December Durable Goods Orders released at 8:30 AM EST on Tuesday are expected to increase 0.8% versus a 1.1% decline in November.

Bank of Canada’s Decision on interest rates is released at 9:45 AM EST on Wednesday. Consensus calls for a 0.25% drop to 3.00%. Press Conference is offered at 10:30 AM EST

FOMC decision on interest rates is released at 2:00 PM EST on Wednesday. Consensus calls for no change in the Fed Fund Rate at 4.50%. Press conference is offered at 2:30 AM EST.

Fourth quarter U.S. GDP is released at 8:30 AM EST on Thursday

December Core PCE Price Index is released at 8:30 AM EST on Friday

December U.S. Personal Income released at 8:30 AM EST on Friday is expected to increase 0.4% versus a 0.3% gain in November. December U.S. Personal Spending is expected to increase 0.4% versus a 0.4% gain in November.

Canada’s November GDP released at 8:30 AM EST on Friday is expected to ease 0.1% versus a 0.3% increase in October.

Selected Earnings News This Week

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for January 24^th 2025

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 January 24^th 2025

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for January 24^th 2025

Green: Increase from previous day

Red: Decrease from previous day

Changes last week

Technical Notes for Friday

TSE Information Technology Index moved above Cdn$298.70 to an all-time high extending an intermediate uptrend.

AstraZeneca $AZN a NASDAQ 100 stock moved above $69.00 completing a double bottom pattern. The company announced plans to spend Cdn$820 million to expand Canadian operations.

Links offered by valued providers

Michael Campbell’s Money Talks for January 25^th

Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)

Stocks Driven Higher by AI Energy Demand: Mark Leibovit

Stocks Driven Higher by AI Energy Demand – HoweStreet

What to expect from the BoC amid Trump’s threats: BNN

What to expect from the BoC amid Trump’s threats – YouTube

Mike Wilson’s 2025 Outlook: Valuations, Inflation & the AI Economy

Mike Wilson’s 2025 Outlook: Valuations, Inflation & The AI Economy – YouTube

We’re preparing for a record $1.5 trillion of buybacks this year, says Goldman Sachs’ Meena Flynn

We’re preparing for a record $1.5 trillion of buybacks this year, says Goldman Sachs’ Meena Flynn – YouTube

CHART THIS with David Keller, CMT Friday 1/24/25

https://www.youtube.com/watch?v=V1lIs75xJGE

Comment on Semiconductors sector: David Keller

Semiconductors Have More to Prove Before Breakout is Believed | The Mindful Investor | StockCharts.com

Gold Juniors Carry High Potential: Bob Hoye

Gold Juniors Carry High Potential – HoweStreet

The US Definitely Needs Canadian Oil and Gas: Josef Schachter

The US Definitely Needs Canadian Oil and Gas – HoweStreet

S&P 500 Momentum Barometers

The intermediate term Barometer slipped 1.40 on Friday, but gained 9.40 last week to 51.60. It remains Neutral. Daily trend is up.

The long term Barometer slipped 0.20 on Friday, but gained 1.40 last week to 61.80. It remains Overbought.

TSX Momentum Barometers

The intermediate term Barometer slipped 0.45 on Friday, but gained 10.36 last week to 51.80. It remains Neutral. Daily trend is up.

The long term Barometer dropped 1.80 on Friday, but gained 2.26 last week to 66.22.

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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