Pre-opening Comments for Wednesday April 4th
U.S. equity index futures are lower this morning. S&P 500 futures are down 11 points in pre-opening trade.
Index futures were virtually unchanged following release of the March ADP Private Employment report. Consensus was an increase of 213,000. Actual was 209,000.
The European Central Bank maintained its overnight lending rate at a record low 1.00%.
Monsanto added $1.28 to $83.08 after reporting higher than consensus fiscal second quarter earnings and after offering positive second half guidance.
General Electric slipped $0.30 to $19.66 after Moody’s downgraded the company’s credit rating one notch to AA3.
IBM fell $3.25 to $206.35 after Bank of America/Merrill downgraded the stock from Buy to Neutral.
McDonald’s dropped $0.85 to $31.00 after Goldman Sachs downgraded the stock from Conviction Buy to Buy. Target was reduced from $114 to $110.
Tim Hortons (THI $54.15 Cdn.) is expected to open lower after Goldman Sachs downgraded the stock from Buy to Neutral.
Bond holders of Yellow Media have proposed a debt-to-equity swap.
American International Group added $0.23 to $31.10 after Bernstein upgraded the stock from Market Perform to Outperform.
Starbucks gained $0.09 to $57.00 after Goldman Sachs upgraded the stock from Neutral to Conviction Buy. Target price was raised from $49 to $66.
International Business Machines (NYSE:IBM) – $206.35 fell 1.6% after Bank of America/Merrill downgraded the stock from Buy to Neutral. IBM has the highest weight of the 30 stocks that are part of the Dow Jones Industrial Average. The stock has a positive technical profile. Intermediate trend is up. The stock closed at an all-time high yesterday. It trades above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has been positive since mid-January. Seasonal influences turn positive in mid-April. Preferred strategy is to accumulate the stock closer to its 20 day moving average at $205.17.
International Business Machines Corp. (NYSE:IBM) Seasonal Chart
McDonald’s (NYSE:MCD) – $98.55 fell 0.9% after Goldman Sachs downgraded the stock from Conviction Buy to Buy. Target was reduced from $114 to $110. The stock has a deteriorating technical profile. Intermediate trend is down. Resistance is at its all-time high at $101.51Short term momentum indicators are overbought. Strength relative to the S&P 500 Index has been negative since mid-December. Seasonal influences currently are positive. Preferred strategy is to accumulate the stock on weakness closer to support at $95.13.
McDonald’s Corporation (NYSE:MCD) Seasonal Chart
Tim Hortons, Inc. (TSE:THI) – $54.15 is expected to open lower after Goldman Sachs downgraded the stock from Buy to Neutral. The stock has a positive technical profile. Intermediate trend is up. Last week the stock touched an all-time high at $54.15. The stock trades above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has been positive since the beginning of February. Short term momentum indicators are overbought and have rolled over. Preferred strategy is to accumulate the stock on weakness closer to its 50 day moving average at $51.47.
Gasoline prices reached new highs again yesterday. Gasoline prices in Toronto were scheduled to increase overnight to $1.40 per litre, up more than $0.04 per liter. ‘Tis the season for gasoline prices to move higher!
Equity and bond markets came under pressure yesterday following release of the FOMC meeting minutes for March. Trader interpretation of the minutes was that the possibility of Quantitative Easing 3 has diminished. Long term Treasury bond price were notably weaker. The long term Treasury bond ETF fell below its 20 and 200 day moving averages.
European equity markets have returned to the spotlight and the picture is not looking good.
FP Trading Desk Headlines
FP Trading Desk headline reads, “Loonie should climb higher if the Bank of Canada takes more hawkish tone”. Following is a link to the report:
FP Trading Desk headline reads, “Risk on trade makes some big assumptions”. Following is a link to the report:
Special Free Services available through www.equityclock.com
Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices.
To login, simply go to http://www.equityclock.com/charts/
Also, please take advantage of Google ads and other ads available in the data base
Following is an example of EquityClock.com’s seasonality charts:
Home Building Industry Seasonal Chart
Disclaimer: Comments and opinions offered in this report at www.timingthemarket.ca 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.
Don and Jon Vialoux are research analysts for Horizons Investment Management Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons Investment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment Management Inc
Horizons Seasonal Rotation ETF HAC April 3rd 2012
Thackray’s 2012 Investor’s Guide
Thackray’s 2012 Investor’s Guide recently has been released. It can be ordered online from Amazon.ca or Amazon.com at http://www.amazon.ca/gp/product/0978220064/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&tag=timthemar-20&linkCode=as2&camp=15121&creative=330641&creativeASIN=0978220064
It can also be ordered online from Brooke’s website: www.alphamountain.com (book is in stock).