The Bottom Line
The TSX Composite Index has just entered its strongest period of seasonal strength in the year relative to the S&P 500 Index. During the past 20 periods from December 14th to March 3rd, the TSX Composite Index has outperformed the S&P 500 Index by 2.7% per period.
What about this year? History is expected to repeat! Consensus for earnings by TSX companies for the fourth quarter to be released from late January to late February calls for accelerating growth relative to the third quarter at a time when earning by the S&P 500 companies are expected to record a deceleration in earnings growth. According to www.Factset.com, consensus earnings gains on a year-over-year basis by S&P 500 companies in the fourth quarter is expected to slow to 8.1% from 13.4% in the third quarter. Slowing growth by S&P 500 companies is occurring when valuations by S&P 500 companies based on current Price/Earnings ratios are at all-time highs. Meanwhile, quarter to quarter earnings gains by Canadian companies in the fourth quarter are expected to accelerate in key sectors, notably financial, gold and base metals. Strength in TSX stocks at this time of year is supplemented by annual additional contributions to TSFA and RRSP accounts from late December to late February. Much of the contributions eventually are investing into equities. Enjoy the proverbial Christmas Rally for both markets from December 14th to January 6th, but prepare to switch into selected Canadian investments during the Christmas rally period.
The proverbial “Christmas Rally” in U.S. equities has lost much of its historic “shine”recently. During the past 10 periods from December 14th to January 6th, the S&P 500 Index has advanced in five periods and declined in five periods. Average gain was only 0.16% per period.
Consensus for Earnings and Revenues for S&P 500 companies
Source: www.factset.com
Analyst earnings estimates increased slightly from last week’s report:
- Consensus for fourth quarter 2025 earnings gains increased to 8.1% from7.7%. Consensus for revenue growth remained at 7.5%. For all of 2025, consensus for earnings gains increased to 12.1% from 11.9%. Consensus for revenue gains remained at 6.9%.
- Consensus for first quarter 2026 calls for a 12.4% earnings increase, up from 12.2% last week. Revenue gains slipped to 7.9% from a previous 8.0% gain.
- Consensus for second quarter 2026 earnings gains increased to 13.8% from 13.6%. Consensus for revenue gains remained at 7.1%.
- Consensus for third quarter 2026 earnings calls for a 13.8% earnings gain, up from 13.6% last week. Consensus for revenue gains remained at 6.3%
- Consensus for fourth quarter 2026 earnings calls for a 17.5% earnings gain and a7.1% revenue gain, unchanged from last week.
- For all of 2026, consensus for earnings growth remained at 14.5%. Consensus for revenue gains remained at 7.1%..
Economic News This Week
December Empire State Survey is released at 8:30 AM EST on Monday
November Canadian Consumer Price Index is released at 8:30 AM EST on Monday
September U.S. Housing Starts released at 8:30 AM EST on Tuesday are expected to increase to 1.320,000 from 1.307,000 units in August.
November U.S. Unemployment released at 8:30 AM EST on Tuesday is expected be unchanged at 4.4%.
September U.S. Business Inventories released at 10:00 AM EST on Tuesday are expected to increase 0.2% versus unchanged in August.
Bank of Canada Governor Maclem speaks at 12:30 PM on Tuesday
October U.S. Retail Sales are released at 8:30 AM EST on Wednesday
Bank of England’s interest rate released at 7:00 PM EST on Thursday is expected to drop to 3.75% from 4.00%.
European Central Bank’s interest rate decision released at 8:15 AM EST on Thursday is expected to remain unchanged at 2.15%.
November U.S. Consumer Price Index is released at 8:30 AM EST on Thursday
December Philly Fed Manufacturing Index is released at 8:30 AM EST on Thursday
October Core PCE Price Index is released at 8:30 AM EST on Friday
October U.S. Retail Sales released at 8:30 AM EST on Friday are expected to be unchanged versus a 0.7% drop in September.
November U.S. Existing Home Sales are released at 10:00 AM EST on Friday
December Michigan Consumer Sentiment released at 10:00 AM EST on Friday is expected to be unchanged from November at 53.3.
Selected Earnings News This Week
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for December 12th 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 December 12th 2025
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for December 12th 2025
Green: Increase from previous day
Red: Decrease from previous day
Technical Notes for Friday
Platinum ETN (PPLT) moved above $157.85 to a 12 year high extending an intermediate uptrend.
Ford (F) an S&P 100 stock moved above $13.81 to a three year high extending an intermediate uptrend.
CSX (CSX) a NASDAQ 100 stock moved above $37.05 extending an intermediate uptrend.
First Quantum Minerals (FM.TO) a TSX 60 stock moved above Cdn$33.88 extending an intermediate uptrend.
Changes Last Week
Links offered by valued providers
Michael Campbell’s Money Talks for December 13th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Markets: Is it Really “Different this Time” ? Bob Hoye
https://www.howestreet.com/2025/12/markets-is-it-really-different-this-time-bob-hoye/
Silver Madness Continues: Mark Leibovit
https://www.howestreet.com/2025/12/silver-madness-continues-mark-leibovit/
Are More Rate Cuts Coming? Goldman Sachs
Are More Rate Cuts Coming? – YouTube
Gold Just Replaced The US Dollar: Guy Adami, Luke Gromen
Gold Just Replaced The US Dollar – YouTube
"Revenge of the 493:" Equal Weight SPX’s Bull Case for 2025’s End: Schwab Network
"Revenge of the 493:" Equal Weight SPX’s Bull Case for 2025’s End – YouTube
2026 Canada Tax Changes: How You’ll Pay LESS Tax on Your Investments
2026 Canada Tax Changes: How You’ll Pay LESS Tax on Your Investments – YouTube
Is This Rally for Real? Here’s What the Charts Are Saying: Mary Ellen McGonagle
https://www.youtube.com/watch?v=S—el7JlOnw
AI Cracks, Markets Slide: Broadcom Shakes Tech Leadership | CHART THIS (Dec 12, 2025) David Keller
https://www.youtube.com/watch?v=4ysrXm2jSIM
Weekly Update with Larry Berman – December 13, 2025
https://www.youtube.com/watch?v=lJ3MYl95nr0
Tom Lee: What’s in store for markets in 2026?
https://www.youtube.com/watch?v=6rQBzHJld-8
Recession in 2026 Will Make The Fed Cut Rates Further: Hilliard MacBeth
https://www.howestreet.com/2025/12/recession-in-2026-will-make-the-fed-cut-rates-further/
Why the Fed’s Cuts May Not Boost Stocks – Long Term: Martin Straith
https://www.howestreet.com/2025/12/why-the-feds-cuts-may-not-boost-stocks-long-term/
S&P 500 Momentum Barometers
The intermediate Barometer dropped 1.00 on Friday, but gained 4.60 last week to 59.60. It remains Neutral.
The long term Barometer was unchanged on Friday, but gained 1.00 last week to 63.40. It remains Overbought.
TSX Momentum Barometers
The long term Barometer was unchanged on Friday, but added 1.42 last week to 66.35. It remains Overbought.
The long term Barometer was unchanged on Friday and dropped 1.42 last week to 81.04. 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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Equity Clock Publications