Pre-opening Comments for Monday July 29th
U.S. equity index futures were higher this morning. S&P 500 futures were up 28 points at 8:30 AM EDT.
Abbott Labs dropped $6.40 to $98.84 after losing litigation on its infant formula.
Alibaba added $2.17 to $78.70 after reports that the company has raised fees.
![clip_image002[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0025-5.png "clip_image002[5]")
McDonald’s added $2.25 to $254.25 despite reporting lower than consensus second quarter revenues and earnings. The company extended its successful “$5 per meal deal”.
EquityClock’s stock market outlook for July 29th
The Treasury Yield Curve is attempting another push towards normalization, threatening to impose a headwind against equity prices ahead. See:
https://equityclock.com/2024/07/27/stock-market-outlook-for-july-29-2024/
The Bottom Line
Focus this week is on the FOMC announcement on the Fed Fund Rate at 2:00 PM EDT Wednesday.
Quarterly earnings reports released to date for the most part have been positive. Focuses this week are on reports released by Microsoft on Tuesday, Meta Platform on Wednesday and Apple and Amazon on Thursday.
Seasonal influences on North American equity indices during a U.S. Presidential Election year historically have been positive until mid-August.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Changes since last week were modest. Forty one percent of companies have reported second quarter results to date: 78% have reported higher than consensus quarterly earnings and 60% have reported higher than consensus revenues. Consensus for second quarter earnings increased last week to a 9.8% gain (versus a previous 9.7% gain) and consensus for second quarter revenues increased to a 5.0% gain (versus a previous 4.9% gain). Consensus for the third quarter earnings slipped to a 6.8% increase (versus a previous 7.7% increase). Consensus for revenues was unchanged at a 5.5% increase.
Earnings gains accelerate further in the fourth quarter. Consensus calls for a 16.7% increase in earnings (versus a previous 17.0% increase) and a 5.5% increase in revenues.
For all of 2024, consensus calls for a 10.9% earnings increase (versus previous 11.0% increase) and a 5.1% revenue increase (versus a previous 5.0% increase).
Earnings gains remain elevated in 2025. First quarter earnings are expected to increase
15.1 % on a year-over-year basis and revenues are expected to increase 5.8% (versus 5.7% increase). Second quarter earnings are expected to increase 14.7% (versus previous 14.5% increase) and revenues are expected to increase 6.0% (versus previous 5.9% increase). For all of 2025 earnings are expected to increase 14.8% (versus previous 14.7% increase) and revenues are expected to increase 6.0%.
Economic News This Week
Source: www.Investing.com
Canadian May GDP released at 8:30 AM EDT on Wednesday is expected to increase 0.1% versus a gain of 0.3% in April.
FOMC rate decision is released at 2:00 PM EDT on Wednesday. Consensus calls for no change in the Fed Fund Rate at 5.25%-5.50%. Look for guidance on timing of the first reduction in the Rate when Federal Reserve Chairman Powell speaks at his 2:30 PM EDT press conference. Will the FOMC lower the Fed Fund rate for the first time at its next meetings on September 18th, November 6th or December 18th?
U.S. second quarter Non-farm Productivity released at 8:30 AM EDT on Thursday.is expected to increase 1.5% versus a gain of 0.2% in the first quarter.
U.S. June Construction Spending released at 10:00 AM EDT on Thursday is expected to increase 0.2% versus a decline of 0.1% in May.
July ISM Manufacturing PMI released at 10:00 AM EDT on Thursday is expected to increase to 49.0 from 48.5 in June
July Non-farm Payrolls released at 8:30 AM EDT on Friday are expected to drop to 177,000 from 206,000 in June. July Unemployment Rate is expected to remain unchanged from June at 4.1%. July Average Hourly Earnings are expected to increase 0.3% versus a gain of 0.3% in June.
U.S. June Factory Orders released at 10:00 AM EDT on Friday are expected to increase 0.5% versus a decline of 0.5% in May.
Selected Earnings News This Week
Source: www.Investing.com
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for July 26th 2024
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 July 26th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for July 26th 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by a valued provider
Is it Time to Take Defensive Investment Positions? Mark Leibovit
Is it Time to Take Defensive Investment Positions? – HoweStreet
The BEST Technical Setups In A Waning Bull Market! David Keller
The BEST Technical Setups In A Waning Bull Market! – YouTube
Distribution Days vs Corrections: What’s the Difference?: David Keller
Distribution Days vs Corrections: What’s the Difference? – YouTube
Michael Campbell’s Money Talks for July27th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Small Caps Shine While Nasdaq Dives! Mary Ellen McGonagle
https://www.youtube.com/watch?v=47wG1nNHQ9k
Weekly Update with Larry Berman – July 27, 2024
https://www.youtube.com/watch?v=CTqtb8z3yaI
Tech Stocks drop worldwide: Bob Hoye
Tech Stocks Drop World Wide – HoweStreet
Rising Unemployment Now Bank of Canada’s Biggest Concern: Danielle Park
Rising Unemployment Now Bank of Canada’s Biggest Concern – HoweStreet
Trading Desk Notes for July 27, 2024: Victor Adair
Trading Desk Notes for July 27, 2024 – HoweStreet
WTI falls to US$77.30 on weakening China demand: Josef Schachter
WTI Falls >US$4/b Over The Last Week To US$77.30/b On Weakening China Demand
New Highs Coming or Will We Collapse? What Say You, Fed Chief Powell? Tom Bowley
Technical Scoop for July 29th from David Chapman and www.EnrichedInvesting.com
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 for Friday
Baker Hughes $BKR a NASDAQ 100 stock moved above $36.85 and $37.57 to an all-time high extending an intermediate uptrend.
Power Corp $POW.TO a TSX 60 stock moved above Cdn$40.00 to an all-time high extending an intermediate uptrend.
S&P 500 Momentum Barometers
The intermediate term Barometer added 7.00 on Friday and gained 4.60 last week to 69.80. It remains Overbought.
The long term Barometer added 4.40 on Friday and gained 2.80 last week to 77.80. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer added 4.87 on Friday, but slipped 0.45 last week to 73.89. It remains Overbought.
The long term Barometer added 1.33 on Friday and gained 0.44 last week to 81.86. 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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July 29th, 2024 at 9:25 pm
David Chapman’s charts and comments on copper are very interesting to me. This is from the commentary above:
Technical Scoop for July 29th from David Chapman and http://www.EnrichedInvesting.com
https://enrichedinvesting.com/wp-content/uploads/2024/07/Divisive-backdrop-wobbly-markets-DJI-benefit-signals-close-golden-outlook-copper-skids-BOC-cut.pdf
Note pages 9 – 12.