The Bottom Line
Good news on the economy in December was bad news for U.S. and Canadian equity markets on Friday: Stronger than expected December Non-farm Payrolls in the U.S. and higher Canadian December employment exceeding consensus estimates were reported. In response, government bond yields on both sides of the border spiked higher and the prices of interest sensitive equities moved lower. Notably weaker on both sides of the border were equities in the financial services sector.
Consensus for Earnings and Revenues for S&P 500 companies
Source: www.factset.com
Earnings and revenue gains accelerate in the fourth quarter from the third quarter. Analyst consensus calls for an 11.7% year-over-year earnings increase (versus an 11.9% increase last week) and a 4.7% revenue increase (versus a 4.6% increase last week).
For all of 2024, consensus calls for a 9.4% earnings increase and a 5.0% revenue increase.
Analyst estimates for earnings and revenues for 2025 changed slightly last week. Consensus for first quarter earnings called for an 11.8 % increase on a year-over-year basis (versus an 11.9% increase last week). Consensus for first quarter revenues was unchanged with a 5.1% increase. Consensus for second quarter earnings was unchanged with an 11.6% increase and consensus for second quarter revenues was unchanged with a 5.0% increase. Third quarter earnings are expected to increase 15.3% (versus a 15.2% increase last week) and revenues are expected to increase 5.7% (versus a previous 5.6% increase). Fourth quarter earnings are expected to increase 17.2% (versus a previous 16.6% increase) and revenues are expected to increase 6.7%. For all of 2025 earnings are expected to increase 14.8% and revenues are expected to increase 5.8%.
Above average earnings growth is expected to continue into 2026, albeit at a slightly lower rate. Consensus calls for a 13.6% earnings increase and a 6.4% revenue increase.
Economic News This Week
December U.S. Producer Price Index released at 8:30 AM EST on Tuesday is expected to increase 0.3% versus a 0.4% increase in November. On a year-over-year basis, consensus calls for a 3.0% increase versus a 3.0% increase in November.
December U.S. Consumer Price Index released at 8:30 AM EST on Wednesday is expected to increase 0.3% versus a 0.3% increase in November.
January Empire State Manufacturing Survey is released at 8:30 AM EST on Wednesday
December U.S. Retail Sales released at 8:30 AM EST on Thursday are expected to increase 0.5% versus a 0.7% increase in November. Excluding auto sales, December Retail Sales are expected to increase 0.4% versus a 0.2% increase in November.
January Philly Fed Index is released at 8:30 AM EST on Thursday
November U.S. Business Inventories released at 10:00 AM EST on Thursday are expected to increase 0.6% versus a gain of 0.1% in October.
December U.S. Housing Starts are released at 8:30 AM EST on Friday
December U.S. Industrial Production released at 9:15 AM EST on Friday is expected to increase 0.2% versus a 0.1% drop in November. December Capacity Utilization is expected to increase to 77.6% from 76.8% in November.
Selected Earnings News This Week
Twenty S&P 500 companies are scheduled to release quarterly results this week (including three Dow Jones Industrial Average companies: JP Morgan, Goldman Sachs and UnitedHealth Group).
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for January 10th 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 January 10th 2025
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for January 10th 2025
Green: Increase from previous day
Red: Decrease from previous day
Changes last week
Technical Notes for Friday
S&P 500 Index moved below 5,832.30 completing a Head & Shoulders pattern.
Dow Jones Industrial Average moved below 42,146.33 setting an intermediate downtrend.
United States Oil Fund $USO moved above $79.31 extending an intermediate uptrend.
China Large Cap iShares $FXI moved below $28.93 setting an intermediate downtrend.
U.S. Financial ETFs moving below support and extending downtrends included Financial SPDRs (XLF), U.S. Insurance iShares (IAK), S&P Bank SPDRs (KBE), U.S. Broker/Dealers (IAI).
S&P 100 and NASDAQ 100 stocks moving below support on Friday setting intermediate downtrends included Blackrock, Berkshire Hathaway, PayPal, Microchip Technology, ON Semiconductor, Take Two, Procter & Gamble, JD.com, Monster Beverages, Travelers, Autodesk, NextEra Energy, Bank of New York Mellon, Regeneron Pharmaceuticals, Duke Energy, McCormick,
TSX 60 stocks moving below support on Friday setting intermediate downtrends included Sun Life Financial, Manulife Financial, Open Text, Royal Bank, Saputo and Restaurant Brands International
Links offered by valued providers
Crypto’s Sucking Money Out of Gold Market? Mark Leibovit
Crypto’s Sucking Money Out of Gold Market? – HoweStreet
S&P 500 Breakdown Alert! Downside Targets Explained: David Keller
https://www.youtube.com/watch?v=DKRRajYZrFQ
Yields Spike After Hot Jobs Report: Dan Nathan, Liz Young Thomas and Guy Adami
Note comment on the energy sector
https://www.youtube.com/watch?v=7C7feoJ9MYw&t=80s
Mike’s Money Talks for January 11th 2025
January 11 Episode (mikesmoneytalks.ca)
Trading Desk Notes for January11th: Victor Adair
https://www.howestreet.com/2025/01/trading-desk-notes-for-january-11-2025/
Is Deflation Good for the Economy? Bob Hoye
https://www.howestreet.com/2025/01/is-deflation-good-for-the-economy-bob-hoye/
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 9.00 on Friday and fell 7.40 last week to17.20. It remains Oversold. Daily trend is down.
The long term Barometer dropped 4.40 on Friday and fell 5.20 last week. It remains Neutral. Daily trend is down.
TSX Momentum Barometers
The intermediate term Barometer dropped 4.93 on Friday and dropped 7.18 last week to 39.01. It changed from Neutral to Oversold on a move below 40.00.
The long term Barometer dropped 1.35 on Friday and fell 3.58 last week to 64.13. 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