Pre-opening Comments for Tuesday May 20th
U.S. equity index futures were lower this morning. S&P 500 futures were down 15 points at 8:35 AM EDT.
The Canadian Dollar added 0.13 to U.S.71.76 cents following release of Canada’s April Consumer Price Index at 8:30 AM EDT. Consensus was a 0.2% drop. Actual was a 0.1% drop. On a year-over-year basis, consensus was a 1.6% increase versus a 2.3% gain in March. Actual was a 1.7% increase.
Home Depot added $8.72 to $388.10 after reporting higher than consensus first quarter revenues. The company also offered positive guidance.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2025/05/clip_image0011-8.png "clip_image001[1]")
Amer Sports advanced $3.72 to $35.11 after reporting higher than consensus first quarter results. The company also offered positive guidance.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2025/05/clip_image0021-9.png "clip_image002[1]")
UnitedHealth Group added $7.31 to $323.20 following recent news of insider buying.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2025/05/clip_image0031-7.png "clip_image003[1]")
Technical action by U.S. equity markets yesterday.
A mixed day! S&P 500 Index added 5.22 to 5,963.60. Technical action by S&P 100 and NASDAQ 100 stocks was quietly bullish. Stocks breaking out above resistance, extending intermediate uptrends included Booking Holdings (all-time high), Raytheon Technologies (all-time high), Visa (all-time high), Dollar General and General Dynamics. No technical breakdowns.
EquityClock’s Market Outlook for May 20th
Industrial production upbeat early into the year, but manufacturer sentiment is not. See:
https://equityclock.com/2025/05/17/stock-market-outlook-for-may-20-2025/
Technical Scoop for May 19th from David Chapman and www.EnrichedInvesting.com
https://enrichedinvesting.com/library/
The Bottom Line
All-time highs by the TSX Composite Index and S&P/TSE 60 Index! The later Index moved above 1,561.25 on Friday.
U.S. investors are anticipating resolution of tariff wars after President Trump delayed implementation of punishing tariffs for the next 90 days. Both the S&P 500 Index and the Dow Jones Industrial Average turned positive for the year late last week on the news. The S&P 500 Index moved above its December 31st 2024 close at 5,881.63 on Thursday and the Dow Jones Industrial Average moved above its December 31st close at 42,594.22 on Friday.
And now the caveat! Technically, North American equity markets are overbought and are vulnerable to an intermediate correction. See momentum charts near the end of this report. On a seasonal basis, The S&P 500 Index has a history of reaching an intermediate peak near the middle of May during Post Presidential Election Years, This year, U.S. equity markets have responded favourably to better than expected first quarter corporate earnings and revenues, but have yet to respond to an accelerating decline in earnings and revenue expectations for the remainder of 2025. North American equity markets are vulnerable to an intermediate correction. Caveat emptor!
Consensus for Earnings and Revenues for S&P 500 companies
Source: www.factset.com
Analyst estimates for earnings gains for the first quarter of 2025 increased again last week: 92% of S&P 500 companies have reported to date. First quarter results benefitted from accelerated consumer purchases prior to implementation of tariffs. Consensus for first quarter earnings gains calls for a 13.6% increase on a year-over-year basis, up from 13.4% last week. Consensus for first quarter revenues growth was unchanged at 4.8%.
Analyst estimates for 2025 beyond the first quarter once again were reduced significantly. Analysts responded to additional company updates. More companies withdrew guidance due to growing uncertainty related to proposed tariffs. Consensus for second quarter earnings gains dropped to 4.8% from 5.2% last week. Consensus for second quarter revenue gains slipped to 3.9% from 4.0%. Consensus for third quarter earnings gains dropped to 7.0% from 7.4% last week. Consensus for third quarter revenue growth slipped to 4.6% from 4.7%. Consensus for fourth quarter earnings gains dropped to 6.1% from 6.7% last week. Consensus for fourth quarter revenue gains dropped to 4.9% from 5.2%.
For all of 2025, earnings are expected to increase 9.0%, down from 9.3% last week. Consensus for revenue gains remained at 5.0%.
For all of 2026, earnings are expected to increase 13.4%, down from 13.5% last week. Consensus for revenue gains slipped to 6.2% from 6.3%.
Economic News This Week
Canada’s April Consumer Price Index released at 8:30 AM EDT on Tuesday is expected to increase 0.5%, up from 0.3% in March. On a year-over year basis, April CPI is expected to increase 1.6%, down from 2.3% in March.
U.S. April Existing Home Sales released at 10:00 AM EDT on Thursday are expected to increase to 4.15 million from 4.02 million in March.
Canadian March Retail Sales released at 8:30 AM EDT on Friday are expected to increase 0.3% versus a 0.4% decline in February.
U.S. April New Home Sales released at 10:00 AM EDT on Friday are expected to drop to 690,000 from 724,000 in March.
Selected Earnings News This Week
Another 18 S&P 500 companies are scheduled to report this week (including one Dow Jones Industrial Average company: Home Depot). Focuses are on reports by major retail companies. In Canada, Toronto Dominion Bank is expected to launch fiscal second quarter results for Canada’s major banks.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 16th 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 May 16th 2025
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 16th 2025
Green: Increase from previous day
Red: Decrease from previous day
Changes last week
Technical Notes
Industrial SPDRs $XLI moved above $143.35 to an all-time high extending an intermediate uptrend.
U.S. Telecommunications iShares $IYZ moved above $28.62 to a three year high extending an intermediate uptrend.
Alphabet $GOOG an S&P 100 stock moved above $168.24 completing a double bottom pattern. $GOOGL moved above $166.10 completing a double bottom pattern.
Bank of New York Mellon $BK an S&P 100 stock moved above $89.78 to an all-time high extending an intermediate uptrend.
eBay $EBAY a NASDAQ 100 stock moved above $71.29 to an all-time high extending an intermediate uptrend.
Links offered by valued providers
S&P 500 Now in Weakest Seasonal Period… Or Is It? David Keller
S&P 500 Now in Weakest Seasonal Period… Or Is It? | The Mindful Investor | StockCharts.com
Mike’s Money Talks for May 17th
May 17 Episode – Michael Campbell’s Money Talks – Omny.fm
What Sector Rotation Says About the Market Cycle Right Now: Julius de Kempebaer
What Sector Rotation Says About the Market Cycle Right Now – YouTube
S&P 500 Rally Broadens, NVDA Breakout Boosts Tech: Kevin Green
S&P 500 Rally Broadens, NVDA Breakout Boosts Tech – YouTube
Chart Check on the Markets: S&P 500, Gold & Yields: Guy Adami and Carter Worth
Chart Check on the Markets: S&P 500, Gold & Yields – YouTube
Dan Niles 50% Market Crash Warning Despite AI Boom | Top Tech Investor Explains Why
Dan Niles 50% Market Crash Warning Despite AI Boom | Top Tech Investor Explains Why – YouTube
Tariffs or no tariffs, the U.S. profit cycle is poised to peak here, says Richard Bernstein
This week in money: Ross Clark,, Victor Adair, Mark Leibovit
S&P 500 Momentum Barometers
The intermediate term Barometer advanced 5.80 on Friday and 16.80 last week to 79.00. It remains Overbought. Daily uptrend was extended.
The long term Barometer added 2.80 on Friday and 14.60 last week to 58.40. It remains Neutral. Daily uptrend was extended.
TSX Momentum Barometers
The intermediate term Barometer was unchanged on Friday and gained 3.03 last week to 77.88. It remains Overbought
The long term Barometer added 0.92 on Friday and gained 4.89 last week to 65.90. 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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May 20th, 2025 at 11:50 am
SPX – This looks like a good point for it to pull-back from right around RSI 70. The market tried that on Friday and failed with it finishing strong. A drop down to do a gap fill and meet the 20 day MA would end this overbought state it is in. IMO its’ quite difficult to go higher right now after such a stunning rally.
GLD is picking up some steam again as a safe haven and the US 10 year bond yield is inching higher. You have to wonder what kind of news may come down the pipeline and where it will send the market in either direction.
May 20th, 2025 at 12:02 pm
I meant yesterday Monday when I said Friday.
May 20th, 2025 at 6:12 pm
Larry
Agree, looks like SPX is starting to hit a upper boundary, hoping this is indicative for the next leg down to start. GLD firming, but we may not break out of the $3300/oz near term limit, but once it does 3500-3750 is possible next stop. Guess it will depend on the southern circus to see if these trends firm in the coming weeks. I think a no trade deal with India (on Wednesday) would only reinforce those trends which are just starting to firm.