Earnings Season Continues, Trade Talks Move to D.C. Next Week

May 2, 2019
By Vlad Karpel

Markets are trading modestly lower after yesterday’s Fed decision to keep rates unchanged, continuing to stress patience and providing some positive guidance on inflation which currently sits below its target of 2%. The Bank of England, similarly, decided today to keep rates unchanged. Major earnings yesterday saw Qualcomm shares lower following their settlement with Apple while Square also saw shares lower due to lower than expected earnings. Today, focus shifts to labor data as well as earnings from Activision, CBS, Discovery, Gilead, and Royal Dutch Shell. Under Armor, Dunkin Donuts, and Kellogg reported before the market opened today. The SPY is still on pace to retest 52 weeks high, $294. Currently, the SPY trades above its 50-day moving average with support at $286. For reference, the SPY Seasonal Chart is shown below:

Corporate earnings remain the focus today and through next week, following the conclusion of the two-day FOMC meeting. The latest Federal Open Market Committee policy statement kept rates unchanged and reported inflation remains below the 2% target. Jerome Powell downplayed talks of rate cuts that many have projected due to the current economic conditions and employment rate. Patience remains a key aspect of policy updated in 2019 while maximizing employment is also key. Weekly labor data released today remains solid while tomorrow we will see April labor data, as well as manufacturing numbers. Next week features a lighter load of economic data although several big-name reports are due: Trade Deficit, Federal budget, Core CPI, Consumer and Producer Price Indices. Also taking place next week, trade talks between the U.S. and China will be hosted in Washington after a week of talks in Beijing.

Early morning earnings today featured Under Armor and Dunkin Brands, both of which topped expectations and saw shares grow. Dow DuPont, also releasing before market open, reported below expectations and saw shares drop 6%. Royal Dutch Shell saw earnings that solidly beat expectations and pushed shares up nearly 2%. Look for Activision, CBS, Gilead Sciences, and U.S. Steel earnings after market close today. Berkshire Hathaway leads major earnings tomorrow while next week Disney, Lyft, and several other big-name reports are due.  

Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows positive signals. Today’s vector figure of -0.16% moves to +0.75% in five trading sessions. The predicted close for tomorrow is 2,932.63. Prediction data is uploaded after the market close at 6 pm, CST. Today’s data is based on market signals from the previous trading session.  


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Highlight of a Recent Winning Trade

On April 25th, our ActiveTrader service produced a bullish recommendation for Constellation Brands Inc (STZ). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.

Trade Breakdown

STZ entered its forecasted Strategy B Entry 1 price range $210.14 (± 1.90) in its first hour of trading and passed through its Target price $212.24 in the first hour of trading that day. The Stop Loss price was set at $208.04.


Friday Morning Featured Stock

*Please note: Our featured stock is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader or MonthlyTrader recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

Our featured stock for Friday is Navient Corporation (NAVI). NAVI is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (B) indicating it ranks in the top 25th percentile for accuracy for predicted support and resistance, relative to our entire data universe.  

The stock is trading at $13.80 at the time of publication, up 1.00% from the open with a +1.03% vector figure.

Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.


Oil

West Texas Intermediate for June delivery (CLM9) is priced at $61.83 per barrel, down 2.78% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $12.81 at the time of publication, down 3.00% from the open. Vector figures show -0.30% today, which turns -3.34% in five trading sessions.  Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Gold

The price for June gold (GCM9) is down 0.86% at $1,273.10 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly positive signals. The gold proxy is trading at $120.07 at the time of publication. Vector signals show +0.07% for today. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.  

Treasuries

The yield on the 10-year Treasury note is up 1.80% at 2.55% at the time of publication. The yield on the 30-year Treasury note is up 1.36% at 2.94% at the time of publication.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see positive signals in our 10-day prediction window. Today’s vector of +0.05% moves to +0.46% in three sessions. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Volatility

The CBOE Volatility Index (^VIX) is down 2.43% at $14.44 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $14.34 with a vector of -1.44%. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


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