The Bottom Line
U.S. equity markets are following their traditional pattern during the last quarter of the U.S. Mid-term Presidential Election Year: An intermediate low at the beginning of October followed by an uptrend lasting until at least the first week in January. Advances this year will be triggered by strong year-over-year third and fourth quarter revenue and earnings gains by S&P 500 companies.
The TSX Composite Index and its related S&P/TSX 60 Index units (XIU.TO) also have a 20 year history of reaching a seasonal low in the first week in October.
Earnings and Revenue Consensus for S&P 500 Companies
Source: www.factset.com
Analysts increased their 2026 earnings and revenue estimates again last week.
· Consensus for third quarter 2026 earnings gains increased to 29.5% from 29.1%. Consensus for revenue gains increased to 12.3% from 12.1%.
· Consensus for fourth quarter 2026 earnings gains increased to 27.6% from 26.8%. Consensus for revenue gains increased to 12.2% from11.9%.
· For all of 2026, consensus for earnings gains increased to 32.4% from 32.0%. Consensus for revenue gains increased to 12.4% from 12.3%.
Consensus for earnings and revenue gains into 2027 also increased last week.
· For first quarter 2027, consensus for earnings gain increased to 19.1% from 18.4%. Consensus for revenue gains increased to 11.1% from 11.0%
· For second quarter 2027, consensus for earnings gains increased to 2.3% from 1.7%. Consensus for revenue gains increased to 7.3% from 7.2%
· For all of 2027, consensus for earnings gains increased to 15.8% from 15.4%. Consensus for revenue gains increased to 9.3% from 9.2%.
Economic News This Week
Source: www.marketwatch.com
September ISM Services released at 10:00 AM EDT on Monday are expected to slip to 55.0 from 55.4 in August.
August U.S. Trade Deficit released at 8:30 AM EDT on Tuesday is expected to increase to $102.1 billion from 88.6 billion in July.
FOMC minutes to the previous meeting are released at 2:00 PM EDT on Wednesday
University of Michigan October Consumer Survey released at 10:00 AM EDT on Friday is expected to increase to 48.0 from 47.8 in
Selected Earnings News This Week
Trader’s Corner
Equity Indices and Related ETFs
Commodities
Sectors
Changes Last Week
Technical Notes for Friday
NASDAQ Composite Index ($COMPQ) moved above 26,253.04 to an all-time high extending an intermediate uptrend.
NASDAQ 100 Units (QQQ) moved above $745.05 to an all-time high extending an intermediate uptrend.
Technology SPDRs (XLK) moved above $198.26 to an all-time high extending an intermediate uptrend.
Strength in Technology SPDRs was triggered by a move by Nvidia (NVDA) above $236.00 to an all-time high.
TSX Technology iShares (XIT.TO) moved above Cdn$83.00 extending an intermediate uptrend.
Caterpillar (CAT) a Dow Jones Industrial Average stock moved above $830.50 completing a double bottom pattern.
Links offered by valued providers
Michael Campbell’s Money Talks for October 2nd
https://mikesmoneytalks.ca/podcast
The 5% Treasury Yield: It’s Here and How It’ll Affect Stocks: Tom Bowley
The 5% Treasury Yield: It’s Here and How It’ll Affect Stocks (stockcharts.com)
Jobs Report Miss Sends Stocks Surging, Yields Falling, Oil Collapses As Bull Thesis Remains Intact: Verified Investing
https://www.youtube.com/watch?v=Gen9QsFfClg
Gold and Silver Bounce, while Stocks Rally: TheTechnicalTraders
https://www.youtube.com/watch?v=a-HGgKsr9mA
"Start Buying Gold ASAP…" – Martin Armstrong
https://www.youtube.com/watch?v=orYt1a7U13I
Jim Rickards: Washington Needs Inflation, Here’s Who Pays
https://www.youtube.com/watch?v=PQTSl-X_tvk
Mega-cap vs the Market: Which One Has to Give: David Keller
https://www.youtube.com/shorts/F886GBtpsbo
AI Money Is Moving. Here’s Where It’s Going: Mary Ellen McGongle
https://www.youtube.com/watch?v=YvfHF6ZP2Oc
The Warning Signal Before Major Market Tops: Earnings Beat
https://www.youtube.com/watch?v=sFAFDZUNncQ
My Winter Forecast Has Changed…
https://www.youtube.com/watch?v=MM6uiVV0Sdw
S&P 500 Momentum Barometers
The intermediate term Barometer added 1.40 and gained 2.60 last week to 25.00. It remained Oversold.
The short term (20 days) Barometer added 1.80 to 26.60 on Friday, but dropped 3.80 last week to 26.60. It remained Oversold.
The long term (200 day) Barometer added 1.60 on Friday, but dropped 3.20 last week to 45.40. It remained Neutral.
TSX Momentum Barometers
The intermediate term Barometer added 2.12 on Friday, but dropped 14.01 last week to 29.77. It remained Oversold.
The short term (20 days) Barometer added 8.15 on Friday, but slipped 1.99 last week to 33.95. It remained Oversold.
The long term Barometer added 3.25 to 53.02 on Friday, but dropped 1.82 last week to 53.02. It remained 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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Equity Clock Publications