Pre-opening Comments for Monday March 31st
U.S. equity index futures were lower this morning. S&P 500 futures were down 58 points at 8:30 AM EDT.
Goldman Sachs raised its probability of a recession in the United States during the next 12 months from 20% to 35%.
World equity indices were lower overnight. The Nikkei Average dropped 1,502.77 to 35,617.56.
Tesla dropped $14.21 to $249.26 after Stifel lowered its target price from $474 to $455.
Boeing dropped $2.85 to $170.46. The company’s revenue and earnings are expected to be impacted by tariffs that will increase the cost of imported parts included in new aircrafts.
EquityClock’s Market Outlook for March 31st
While stocks are currently showing strain, one of the strongest months of the year for performance is directly ahead: The S&P 500 Index has averaged a return of 1.7% in April with a gain frequency of 72%. See:
https://equityclock.com/2025/03/29/stock-market-outlook-for-march-31-2025/
Technical Scoop for March 31st from David Chapman and www.EnrichedInvesting.com
https://enrichedinvesting.com/library/
The Bottom Line
Focus this week is on imposition of a 25% tariffs on goods imported into the United States to be announced officially by President Trump on Wednesday April 2nd. Growing political uncertainty related to the tariffs and likely counter tariffs were a major reason for weakness in North American equity indices last week. Leading the weakness was the Technology sector on a drop to a seven month low.
The CNN Fear & Greed Index remained elevated at 22 indicating “Extreme Fear”. See
https://www.cnn.com/markets/fear-and-greed
Major North American equity indices are expected to test their March 13th lows early this week. Their lows are 5,504.65 for the S&P 500, 40,661.77 for the Dow Jones Industrial Average, 17,239.44 for the NASDAQ Composite Index and 24,145.59 for the TSX Composite Index.
Consensus for Earnings and Revenues for S&P 500 companies
Source: www.factset.com
Analyst estimates for earnings and revenue gains for 2025 recorded modest changes last week. Consensus for first quarter earnings calls for a 7.3 % increase on a year-over-year basis, up from 7.1% last week. Consensus for first quarter revenues growth remained at 4.2%. Consensus for second quarter earnings gains slipped to 9.3% from 9.4% last week. Consensus for second quarter revenue gains remained at 4.6%. Consensus for third quarter earnings gains slipped to 11.9% from 12.0% last week. Consensus for third quarter revenue growth remained unchanged at 5.4%. Consensus for fourth quarter earnings gains remained at 11.4%. Consensus for fourth quarter revenue gains remained at 6.0%.
For all of 2025, earnings are expected to increase 11.5%, up from an 11.4% increase last week. Consensus for revenue gains was unchanged at 5.4%.
Earnings gains are expected to accelerate into 2026. Consensus calls for a 14.3% earnings gain, up from 14.2% last week. Consensus for revenue gains remained unchanged at 6.5%.
Economic News This Week
February U.S. Construction Spending released at 10:00 AM EDT on Tuesday is expected to increase 0.2% versus -0.2% in January.
March ISM Manufacturing PMI released at 10:00 AM EDT on Tuesday is expected to drop to 49.6 from 50.3 in February
February U.S. Factory Orders released at 10:00 AM EDT on Wednesday are expected to increase 0.5% versus a 1.7% increase in January.
February Canadian Merchandise Trade Surplus released at 8:30 AM EDT on Thursday is expected to slip to a $3.40 billion from $3.97 billion in January.
March ISM Non-manufacturing PMI released at 10:00 AM EDT on Thursday is expected to slip to 53.0 from 53.5 in February.
March Non-farm Payrolls released at 8:30 AM EDT on Friday is expected to drop to 139,000 from 151,000 in February. March Unemployment Rate is expected to remain unchanged at 4.1% in February. March Average Hourly Earnings are expected to increase 0.3%, unchanged from February.
March Canadian Employment Change released at 8:30 AM EDT on Friday is expected to increase to 9,900 from 1,100 in February.
Selected Earnings News This Week
Quiet week: Three S&P 500 companies on Thursday and one TSX 60 companies on Wednesday.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for March 28th 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 March 28th 2025
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for March 28th 2025
Green: Increase from previous day
Red: Decrease from previous day
Changes last week
Links offered by valued providers
Michael Campbell’s Money Talks for March 31st
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Market Uncertainty Powering Gold to Record Highs: Mark Leibovit
Market Uncertainty Powering Gold to Record Highs – HoweStreet
Energy Reality Check: Oil Rebounds, LNG Canada Launch & U.S. Shale Weakness | Eric Nuttall
https://www.youtube.com/watch?v=vl3wQ4EoSsU
4 Reasons to Avoid Buying Stocks on Fridays: ValueTrendCanada
https://www.youtube.com/watch?v=LAjVJkRV9Zw
Keep Buying Stocks, Says Wall Street Bull Brian Belski of BMO
https://www.youtube.com/watch?v=pwv6hgxHm7M
Bear Flag Alert: David Keller
Bear Flag Alert – Downside S&P 500 Target Update | The Mindful Investor | StockCharts.com
Is Canada Joining the USA a Good Idea? Bob Hoye
Is Canada Joining the USA a Good Idea? – HoweStreet
Trading Desk Notes for March 29, 2025 Victor Adair
Trading Desk Notes for March 29, 2025 – HoweStreet
Technical Notes for Friday
Technology SPDRs $XLK moved below $205.93 extending an intermediate downtrend.
Technology stocks dominated the list of stocks breaking intermediate support on Friday. S&P 100 stocks and NASDAQ 100 stocks moving below support setting intermediate downtrends included Illumina (ILMN) on a move below $80.18, Microchip Technology (MCHP) on a move below $172.62, Applied Materials (AMAT) on a move below $145.37, ON Semiconductor (ON) on a move below $41.59, PayPal (PYPL)on a move below $66.34, Trimble (TRMB) on a move below $65.75, Meta Platforms (META) on a move below $574.66, Salesforce.com (CRM) on a move below $269.75 and Palo Alto Networks (PANW)on a move below $172.62
Auto ETF $CARZ moved below $54.73 and $54.13 extending an intermediate downtrend. Responded to Tariff news announced by President Trump on Thursday!
Metro $MRU.TO a TSX 60 stock moved above Cdn$97.25 to an all-time high extending an intermediate uptrend.
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 5.60 on Friday but added 0.60 last week to 35.20. It remains Overbought.
The long term Barometer dropped 4.40 on Friday and was unchanged last week at 42.80. It remains Neutral.
TSX Momentum Barometers
The intermediate term Barometer dropped 5.42 on Friday and dropped 2.73 last week to 50.00.It remains Neutral.
The long term Barometer dropped 1.38 on Friday and 0.96 last week to 55.96. It remains Neutral.
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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March 31st, 2025 at 10:45 am
BMO Investorline down this morning. I’m typing at 10:43 and it has been down all morning. This happens sometimes when there is heavy trading.
March 31st, 2025 at 12:07 pm
Larry
Just returned from Florida and was super surprised that nothing being said or communicated about the current political / fiscal issues within the US. Feels like the Americans will only start to understand once the curtain has come down. Continue to see this market moving lower, next leg lower likely on Liberation Day (Wed Apr 2nd).
March 31st, 2025 at 4:04 pm
Bman/Van I just check Fox News occasionally to gauge what is being communicated there. If you go to their business section you will never see a headline about markets when they are dropping (perhaps that was the reverse when Biden was in office). If they removed the indices that they feel obliged to have on the site no one would ever know that there was a market correction going on.
March 31st, 2025 at 4:17 pm
NVDA – It’s trailing PE has never been this low since July 2019. Trailing PE 37.3 and forward 24.5. Sentiment is so baaaad but IMO completely overdone. I picked up a very small amount today which I will just sit on and if it trades down I will add incrementally. By year end it should be trading higher.
March 31st, 2025 at 5:53 pm
Here is a chart of XIU.TO, basically, the Toronto blue chip index. Yes, it is down since an all time high at the beginning of February but it has outperformed the BMO S&P equivalent. Note that it has underperformed the XEI.TO, which only contains the dividend paying stocks in the XIU, so higher quality and lower volatility. Also, XIU made a much higher low today, which I take to be a bullish divergence and based on my own portfolio, it is on the back of the energy and financial sectors. Just find this interesting and noting that there is always a bull market somewhere and it currently happens to be in Canada! In spite of everything…
I believe FishFat highlighted the trading range performance of $WTIC in a chart on Friday. Good to see a few more comments recently.
https://schrts.co/hVzmgkFz