Pre-opening Comments for Tuesday September 5^th

U.S. equity index futures were lower this morning. S&P 500 futures were down 11 points at 8:30 EDT.

Oracle added $1.78 to $122.71 after Barclay’s upgraded the stock to Outperform.

American Express gained $0.68 to $160.30 after Royal Bank upgraded the stock to Outperform.

Domino’s Pizza advanced $4.86 to $396.00 after TD Cowen upgraded the stock to Outperform.

 

EquityClock’s Daily Comment

Headline reads “While the market perceived the economic data released on Friday to be strong, we have an opposing view”.

https://equityclock.com/2023/09/02/stock-market-outlook-for-september-5-2023/

The Bottom Line

A word of caution! North American equity indices have a history of reaching a short term peak near the middle of September followed by the weakest period in the year to the second week in October. Charts on the S&P 500 Index and Dow Jones Industrial Average show a similar pattern.

The spike in long term bond yields on Friday was a reminder that the Federal Reserve intends to maintain high interest rates at current or higher levels into Fall. Focus increasingly is on news from the next FOMC meeting released on September 20^th.

Increasing interest rates on Friday prompted the U.S. Dollar Index to close at 104.19, the highest close since March 9^th

 

Consensus for Earnings and Revenues for S&P 500 Companies

Source: www.Factset.com

Second quarter results came in slightly better than consensus. Earnings dropped 4.1% on a year-over-year basis (versus consensus drop of 5.2% in our last report on August 8^th). Revenues increased 0.9% on a year-over-year basis (versus consensus gain of 0.6% on August 8^th).

Consensus estimates for remainder of 2023 have increased slightly since August 8^th. Consensus for the third quarter calls for an earnings increase on a year-over-year basis of 0.5% (versus previous estimated gain of 0.2%). Third quarter revenues are expected to increase 1.6% (versus previous estimate at 1.3%). Consensus for the fourth quarter calls for an 8.2% increase in earnings (versus previous gain of 7.6%). Fourth quarter revenues are expected to increase 3.7% (versus previous gain of 3.4%). For all of 2023, consensus calls for an earnings increase of 1.2% (versus previous gain of 0.8%). Revenues are expected to increase 2.4% (versus previous gain of 2.5%).

The recovery in earnings continues into 2024. Consensus for 2024 calls for a 12.0% increase in earnings (versus previous estimate at 12.2%). Consensus for revenue growth calls for a 5.5% increase (versus a previous increase of 5.1%).

 

Economic News This Week

(Source: www.Investing.com )

Focus this week is on the August Non-Manufacturing ISM PSI report on Wednesday

July Factory Orders released at 10:00 AM EDT on Tuesday are expected to ease 0.1% versus a gain of 2.3% in June.

July Canadian Trade Balance is released at 8:30 AM EDT on Wednesday

July U.S. Trade Deficit released at 8:30 AM EDT on Wednesday is expected to increase to $65.80 billion from $65.50 billion in June

August Non-Manufacturing ISM PMI released at 10:00 AM EDT on Wednesday is expected to slip to 52.6 from 52.7 in July.

Bank of Canada interest rate decision is released at 10:00 AM EDT on Wednesday. Overnight lending rate to major banks is expected to remain unchanged at 5.0%.

August Canadian Employment and Unemployment Rate is released at 8:30 AM EDT on Friday

U.S. July Wholesale Inventories released at 10:00 AM EDT on Friday are expected to slip 0.1% versus a decline of 0.5% in June.

 

Selected Earnings News This Week

Source: www.Investing.com

 

Wednesday: Couche Tard, Copart, American Eagle Outfitters

Friday: Kroger, DocuSign

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for September 1^st 2023

 

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 September 1^st 2023

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for September 1^st 2023

 

Green: Increase from previous day

Red: Decrease from previous day

 

Links offered by valued providers

Michael Campbell’s Money Talks for September 2^nd

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

 

Euro Pacific’s update and second half outlook for U.S. equity markets

2Q23 Update & Outlook – Euro Pacific Asset Management

 

Examining MAJOR Pullbacks within Secular "Go" Trends | GoNoGo Charts (08.31.23)

https://www.youtube.com/watch?v=Or3pCc_YItw

 

Three Ways I Use RSI To Analyze Trends: David Keller

Three Ways I Use RSI To Analyze Trends | The Mindful Investor | StockCharts.com

 

Plenty of Setups Emerge as Bulls Regain Control: Mary Ellen McGonagle

Plenty of Setups Emerge as Bulls Regain Control | The MEM Edge | StockCharts.com

 

Yields, Oil, US Dollar Rise, Equities Tepid: Stock Market Starts the Month With Mixed Signals

Yields, Oil, US Dollar Rise, Equities Tepid: Stock Market Starts the Month With Mixed Signals | ChartWatchers | StockCharts.com

 

You MUST Be Aware of This Seasonality Change Tom Bowley

You MUST Be Aware of This Seasonality Change | Trading Places with Tom Bowley | StockCharts.com

 

HoweStreet Comments from Ross Clark, Mark Leibovit and Martin Straith

This Week in Money – HoweStreet

 

Bob Hoye Sep 1, 2023: China’s Economic Problems Continue to Pile Up

China’s Economic Problems Continue to Pile Up – HoweStreet

 

Victor Adair: Trading Desk Notes For September 2, 2023

Trading Desk Notes For September 2, 2023 – HoweStreet

 

Technical Scores

Calculated as follows:

Intermediate Uptrend based on at least 20 trading days: Score 2

          (Higher highs and higher lows)

Intermediate Neutral trend: Score 0

          (Not up or down)

Intermediate Downtrend: Score -2

          (Lower highs and lower lows)

Outperformance relative to the S&P 500 Index: Score: 2

Neutral Performance relative to the S&P 500 Index: 0

Underperformance relative to the S&P 500 Index: Score –2

 

Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: –1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: –1

Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.

Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower

 

Changes Last Week

Technical Notes

Energy equities and related ETFs were notably higher on Friday extending intermediate uptrends: United States Crude Oil fund moved above $75.36. Oil and Gas Exploration SPDRs $XOP moved above $150.43. Energy SPDRs $XLE moved above $90.00. First Trust Natural Gas ETF $FCG moved above $26.84. Imperial Oil $IMO.TO moved above Cdn$77.72 to an all-time high. ARC Resources $ARX.TO moved above $21.00.

Visa $V a Dow Jones Industrial Average stock moved above $248.55 to an all-time high extending an intermediate uptrend.

IBM $IBM a Dow Jones Industrial Average stock moved above $147.62 to an all-time high extending an intermediate uptrend.

Utilities SPDRs XLU moved below intermediate support at $62.66 in response to higher long term interest rates.

Southern Companies $SO an S&P 100 stock and a major holding in XLU moved below $68.81 extending an intermediate downtrend.

TSX Information/Technology iShares $XIT.TO moved above $47.76 extending an intermediate uptrend.

Constellation Software $CSU.TO a TSX 60 stock and a major holding in XIT.TO moved above $2,829.33 to an all-time high extending an intermediate uptrend.

 

S&P 500 Momentum Barometers

The intermediate term Barometer added 2.80 to 47.80 on Friday and added 13.40 last week to 47.60. It changed from Oversold to Neutral on a recovery above 40.00.

The long term Barometer added 2.00 on Friday and added 7.00 last week to 59.00. It remains Neutral.

 

TSX Momentum Barometers

The intermediate term Barometer added 6.61 on Friday and jumped 17.62 last week to 58.59. It remains Neutral.

The long term Barometer added 0.88 on Friday and 7.05 last week to 54.63. 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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