The Bottom Line
Focuses this week are on Federal Reserve Chairman Powell’s testimonies before Congressional committees on Tuesday and Wednesday and the February U.S. Employment report released Friday morning.
Seasonal influences for equity markets (S&P 500 and ACWX: Rest of the world) have a history of reaching an intermediate low in mid-March for a seasonal trade lasting to the first week in May.
China also is a focus for a seasonal trade into May. Its annual parliament meeting started on Sunday. Based on technical action by Chinese equity indices and related sector ETFs last week, Chinese leaders are expected to offer a bullish outlook for the economy in 2023 Nice breakout last week by the Shanghai Composite above 3310 extending an intermediate uptrend!
Consensus for Earnings and Revenues for S&P 500 Companies
Analyst estimates for fourth quarter 2022 earnings and revenue were adjusted slightly from our last report on February 27th. Ninety nine percent of S&P 500 companies have reported quarterly results to date. According to www.factset.com fourth quarter earnings are expected to decrease 4.6% (versus previous decrease of 4.8%) but revenues are expected to increase 5.3% (versus previous increase of 5.4%).
Earnings estimates for 2023 continued to move slightly lower and revenue estimates moved slightly higher.. According to www.factset.com first quarter 2023 earnings are expected to decrease 5.9% (versus previous decrease of 5.7%) but revenues are expected to increase 1.9% (versus previous increase of 1.8%). Second quarter 2023 earnings are expected to decrease 3.9% (versus previous decrease at 3.7%) and revenues are expected to decrease 0.1%. Third quarter earnings are expected to increase 2.9% (versus a previous increase of 3.0%) and revenues are expected to increase 1.4% (versus previous increase of 1.3%). Fourth quarter earnings are expected to increase 9.6% (versus previous increase of 9.7%) and revenues are expected to increase 3.2% (versus previous increase of 3.3%). For all of 2023, earnings are expected to increase 2.1% (versus previous increase of 2.2%) and revenues are expected to increase 2.0% (versus previous increase of 2.2%)
Economic News This Week
Source: www.investing.com
January Factory Orders released at 10:00 AM EST on Monday are expected to fall 1.5% versus a gain of 1.8% in December.
January U.S. Trade released at 8:30 AM EST on Wednesday is expected to increase to a deficit of $69.00 billion versus a deficit of $67.40 billion in December.
January Canadian Trade Merchandise Balance released at 8:30 AM EST on Wednesday is expected to record a deficit of $500 million versus a deficit of $160 million in December
Federal Reserve Chairman Powell testifies on monetary policy in front of Congressional committees at 10:00 AM EST on Tuesday and Wednesday.
Bank of Canada interest rate for major Canadian Banks released at 10:00 AM EST on Wednesday is expected to remain unchanged at 4.50%.
February Non-farm Payrolls released at 8:30 AM EST on Friday are expected to increase to 200,000 versus a gain of 517,000 in January. February Unemployment Rate is expected to remain at 3.4% set in January. February Average Hourly Earnings are expected to increase 0.3% versus a gain of 0.3% in January. On a year-over-year basis, February Average Hourly Earnings are expected to increase 4.8% versus a gain of 4.4% in January.
February Canadian Employment Change released at 8:30 AM EST on Friday is expected to increase 5,000 versus a gain of 150,000 in January. February Unemployment Rate is expected to increase to 5.1% from 5.0% in January.
Selected Earnings News This Week
Source: www.investing.com
Only four S&P 500 companies are scheduled to release quarterly results this week.
In Canada, only one TSX 60 companies is scheduled to report: Wheaton Precious Metals.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for March 3rd 2023
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for March 3rd 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for March 3rd 2023
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Comments by Mark Leibovit, Ross Clark and Robert Campbell March 4th
This Week in Money – HoweStreet
Michael Campbell’s Money Talks for March 4th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
David Keller interview with several technical analysts
The Road to SPX 5000 | The Mindful Investor | StockCharts.com
Stock Market Waiting Game: What You Should Be Watching
Jayanthi Gopalakrishnan | March 01, 2023 at 06:34 PM
Stock Market Waiting Game: What You Should Be Watching | ChartWatchers | StockCharts.com
Many Stocks in This Industry Popped After Strong Earnings Results — This Similar Company is Due to Report Next Week! Mary Ellen McGonagle | March 03, 2023 at 11:33 PM
Three Signs Employment is Going to Take a Hit
Tom McClellan | March 03, 2023 at 02:34 PM
Three Signs Employment is Going to Take a Hit | Top Advisors Corner | StockCharts.com
Has Spring Sprung In The Market? | Jane Gallina | Your Daily Five (03.03.23)
Has Spring Sprung In The Market? | Jane Gallina | Your Daily Five (03.03.23) – YouTube
Market In New Uptrend After Late Week Rally | Mary Ellen McGonagle | The MEM Edge (03.03.23)
Risk Assets Power Higher Into Weekend | David Keller, CMT | The Final Bar (03.03.23)
Risk Assets Power Higher Into Weekend | David Keller, CMT | The Final Bar (03.03.23) – YouTube
Links offered by Mark Bunting and www.uncommonsenseinvestor.com
11 Stocks Benefitting from AI & the Ones to Avoid – Uncommon Sense Investor
Expect stocks to struggle amid surging rates, says David Rosenberg
https://www.youtube.com/watch?v=R95pWFKdzkU
Technical Scoop 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
BMO Equal Weight Global Base Metals ETF $ZMT.TO moved above $59.00 extending an intermediate uptrend.
Southern Copper $SCCO one of the largest copper producers in the world moved above $77.69 to an all-time high extending an intermediate uptrend.
Steel ETF $SLX moved above $69.18 to a 14 year high extending an intermediate uptrend.
US Steel $X, one of the largest steel producers in the U.S. moved above $31.28 extending an intermediate uptrend.
Aerospace & Defense ETFs ITA and PPA moved to all-time highs extending an intermediate uptrend.
Nikkei Average moved above 27,821.22 setting an intermediate uptrend
Broadcom $AVGO a NASDAQ 100 stock moved above $617.01 extending an intermediate uptrend.
Okta $OKTA a NASDAQ 100 stock moved $82.10 extending an intermediate uptrend.
Activision $ATVI a NASDAQ 100 stock moved above $78.18 extending an intermediate uptrend.
S&P 500 Momentum Barometers
The intermediate term Barometer added 8.20 on Friday and 8.40 last week to 53.80. It remains Neutral.
The long term Barometer added 6.00 on Friday and 5.40 last week to 65.20. It changed on Friday on a move above 60.00 from Neutral to Overbought.
TSX Momentum Barometers
The intermediate term Barometer jumped 11.49 on Friday and 6.81 last week to 60.00. It changed from Neutral to Overbought with a recovery to 60.00.
The long term Barometer added 4.26 on Friday and 8.51 last week to 66.38. It changed from Neutral to Positive on a move above 60.00.
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
