Tech Talk for Monday April 27th 2020

U.S. equity index futures were higher this morning. S&P 500 futures advanced 29 points in pre-opening trade.

Facebook added $4.23 to $194.38 after Stifel Nicolaus increased its target price from $200 to $230.

MasterCard gained $3.84 to $262.60 after Wedbush raised its target price from $250 to $300.

Visa advanced $1.68 to $169.00 after Wedbush increased its target price from $170 to $200.

American Express improved $1.08 to $84.25 after JP Morgan raised its target price from $93 to $100.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/04/25/stock-market-outlook-for-april-27-2020/

Note seasonality charts on Durable Goods Orders and Boeing.

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The Bottom Line

The recovery in equity markets stalled last week. Spread of the coronavirus continued to be a major influence on equity prices. The VIX Index remained elevated but appears to have passed an intermediate peak. World equity markets generally have recovered from intermediate oversold levels and are at or near intermediate neutral levels.

Observations

The VIX Index (better known as the Fear Index) remains elevated, but appears to have peaked in the third week in March, typical of a recovery phase for the U.S. equity market.

Seasonal influences for U.S., European and Far East equity markets historically have reached a seasonal peak in early May followed by a mixed performance into July. Canadian equity markets are the exception with a seasonal peak in late May.

Medium term technical indicators for U.S. equity markets (e.g. Percent of S&P 500 stocks trading above their 50 day moving average) changed from oversold to neutral and continue to trend higher. See end of this report for chart.

Medium term technical indicators for Canadian equity markets remain oversold and continue to trend higher. See end of this report for chart.

Most short term short term momentum indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) turned lower last week. All sectors remained above their 20 day moving average, but short term momentum indicators rolled over from overbought levels

Short term momentum indicators for Canadian markets and sectors mixed again last week. Gold and energy were notably stronger while financials were notably weaker.

Year-over-year consensus earnings for S&P 500 companies were reduced significantly again last week in recognition of a greater impact by the coronavirus: 122 companies have released quarterly results to date. According to FactSet, blended first quarter 2020 earnings are expected to drop 15.8% (versus a decline of 14.5% last week) and blended revenues are expected to increase 0.1% (versus an increase of 0.6% last week). Of reporting companies, fifty companies withdrew previous guidance and ten companies lowered guidance for the second quarter. Second quarter 2020 earnings are expected to fall 31.9% (versus a drop of 26.6% last week) and revenues are expected to drop 8.2(versus a drop of 5.7% last week). Third quarter earnings are expected to fall 16.9% (versus a fall of 13.3% last week) and revenues are expected to decrease 3.4% (versus a decline of 1.6% last week). Fourth quarter earnings are expected to decrease 7.4% (versus a decrease of 4.8% last week) and revenues are expected to increase 0.1% (versus an increase of 1.1% last week). Earnings for all of 2020 are expected to decrease 15.2% (versus a previous decrease of 12.3%) and revenues are expected to decrease 2.3% (versus a previous decrease of 1.2%).

Economic News This Week

First estimate of U.S. first quarter GDP to be released at 8:30 AM EDT on Wednesday is expected to drop 4.0% versus a gain of 2.1% in the fourth quarter.

FOMC statement on interest rates to be released at 2:00 PM EDT on Wednesday is expected to show no change by the Fed Fund Rate. Street rumors suggest that the Fed Fund Rate could go negative. Press conference is held at 2:30 PM EDT

Canadian February GDP to be released at 8:30 AM EDT on Thursday is expected to increase 0.1% versus a gain of 0.1% in January.

March Personal Spending to be released at 8:30 AM EDT on Thursday is expected to drop 5.0% versus a gain of 0.2% in February. March Personal Income is expected to drop 1.5% versus a gain of 0.6% in February.

Many nations outside on North America have a statutory holiday on Friday. Exchanges are closed.

March Construction Spending to be released at 10:00 AM EDT on Friday is expected to drop 3.5% versus a drop of 1.3% in February.

April ISM Manufacturing Index to be released at 10:00 AM EDT on Friday is expected to drop to 36.7% from 49.1% in March.

Selected Earnings News This Week

Another 172 S&P 500 companies are scheduled to report quarterly results this week (including 12 Dow Jones Industrial companies)

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for April 24th 2020

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Seasonal/Technical Commodities Trends for April 24th 2020

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for April 24th 2020

Green: Increase from previous day

Red: Decrease from previous day

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

StockTwits released yesterday @EquityClock

Cameco $CCO.CA $CCJ, a TSX 60 stock moved above U.S. $10.03 resuming an intermediate uptrend.

Agnico-Eagle $AEM.CA, a TSX 60 stock moved above $85.48 to an all-time high extending an intermediate uptrend.

First Quantum Minerals $FM.CA, a TSX 60 stock moved above $8.10 completing a base building pattern.

eBay $EBAY, a NASDAQ 100 stock moved above $39.07 following an upgrade by Stifel Nicolaus from Hold to Buy resuming an intermediate uptrend.

BioMarin Pharma $BMRN, a NASDAQ 100 stock moved above $97.10 resuming an intermediate uptrend.

S&P 500 Momentum Barometer

The Barometer added 1.80 to 41.28 last week. It changed from intermediate oversold to intermediate neutral on a move above 40.0 and continues to trend higher.

TSX Momentum Barometer

The Barometer gained 8.58 to 39.11 last week. It remains intermediate oversold and continues to trend higher.

Disclaimer: Seasonality 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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