Fed Officials Meet But No Rate Hikes as Solid Earnings Continue

In stride with earlier earnings, another heavyweight reports above expectation only to see slim gains in its ticker. Apple’s aftermarket release saw the company beat expectations and report sound growth and revenue but since the report only saw a modest 4% gain. Some important things to note from the earnings call are Apple’s 31% growth in software services, this includes apps and subscriptions such as Apple Music, iCloud, and Apple Pay, Apple’s iPhone X odd performance (both Apple’s best selling iPhone but also one of its biggest underperformers coming in well below expectations), and the $100 billion planned to buy back stocks from investors. Another key number to note is Apple’s 21% growth in China where CEO Tim Cook suggested iPhone sales, in particular the iPhone X, were performing better than ever and a big reason for this growth. With its strong earnings, however, Apple did little to boost indices as all three saw minimal movement in the day since.

The Dow and S&P slightly fell, .21% and .20% respectively, while Nasdaq has been hovering around a .01% gain for the day. Other earnings to watch for today include Yum Brand Foods, which is seeing a nearly 6% drop for the day although earnings are expected to beat expectations, and Mastercard while the rest of the week will feature Kellogg, Dow DuPont, Alibaba, Marriott, and more.

Fed officials wrapped up their two-day meeting today. All key rates were held, with no set changes announced after the meeting. Two more interest rate hikes are planned for the year but the FOMC did not announce another today. Rather Fed Reserve reiterated inflation’s rise, saying it could soon reach the central bank’s 2% limit. Investors should watch for more on inflation in the coming months and will also likely hear more on that in the next central bank meeting taking place in mid-June. Scanning today’s and future Fed statements for dovish or hawkish sentiment could be key in looking ahead at the next couple months of trading, especially with my seasonal charts which look at 50-day moving averages and produce support and resistance levels I highly recommend trading at.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows all negative signals. Today’s vector figure of -.21% moves to -1.93% in three trading sessions before dipping further into negative territory. Today’s predicted support and resistance levels are 2,607.47 (±9.15) and 2,664.88 (± 9.35), respectively. The predicted close for tomorrow is 2,650.70. 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.  

Highlight of a Recent Winning Trade

On April 25th, our ActiveTrader service produced a bullish recommendation for Charles Schwab Corporation (SCHW). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.

Trade Breakdown

SCHW entered Entry 1 price range of $53.90 (± 0.29) in its first hour of trading, moving through its Target Price of $54.44 within the second hour of trading. The Stop Loss was set at $53.36.

Tuesday Morning- Buy, Buy, Buy

Our featured stock for Thursday is The Charles Schwab Corporation (SCHW). SCHW is showing a confident uptrend 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.  Our 10-day prediction model shows positive vector figure reaching +2.00% in four trading session which then incrementally builds throughout the 10-day forecast. Our benchmark for vector figures is +1.00%.

*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 ActiveInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

The stock is trading at $55.65 at the time of publication, up .07% from the open with a +1.01% vector figure.

Thursday’s prediction shows an open price of $56.43, a low of $55.88 and a high of $56.85.

The predicted close for Thursday is $56.05. Vector figures jump to +1.59% on Thursday and drive upward from there. This is a good signal for trading opportunities because we use vectors as a primary factor in determining price movements for stocks and ETF.

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 next trading session relative to the average of actual prices for 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 (CLM8) is priced at $67.45 per barrel, up .27% from the open, at the time of publication. U.S crude supplies saw a weekly rise, three times higher than expected, which countered the worry over further Iran developments. A decision is due on the deal by May 12 which investors should watch for as it will surely impact the commodity.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $13.67 at the time of publication, up .44% from the open. Tomorrow’s prediction sees support at $13.40 and resistance at $13.87. The predicted close for tomorrow is $13.44. Vector figures show -.28% today, which stay negative for the next two trading sessions before reversing to positive territory. 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

With the dollar rally slowing down gold traded slightly higher for the day before dipping lower, post-fed meeting.The dollar made strong gains in April which affected the commodity, however, as more geopolitical news crops up investors should watch for parallel action as gold and the dollar often trade inversely with each other. This also includes possible tax hikes in the coming FOMC meetings.The price for June gold (GCM8) is down 0.07% at $1,306.0 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows all negative signals. The gold proxy is trading at $123.64, down .06% at the time of publication. Tomorrow’s predicted low is $122.94 and the predicted high is $124.51. The predicted close for tomorrow is $123.75. Vector signals show -0.18% for today, reaching -1.00% in two trading session. 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

A new 2-month bill was announced by the Treasury today, along with $73 billion in a planned auction of notes and bonds.The sale will take place next week with auctions of $31 billion in 3-year notes, $25 billion in 10-year notes, and $17 billion in 30-year notes. The yield on the 10-year Treasury note is up 0.22% at 2.98% at the time of publication. The yield on the 30-year Treasury note is up .07% from the open at 3.13%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mostly positive signals in our 10-day prediction window. Today’s vector of -0.16% moves to +0.14% in three trading sessions. The ETF is priced at $118.28 at the time of publication, down 0.11%. The predicted close tomorrow is $118.30 with a low and high of $117.96 and $118.59, respectively. 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 up 1.81% at 15.77 at the time of publication, and our 10-day prediction window shows mostly positive signals. The predicted close for tomorrow is 17.67 with a vector of +9.60%. The predicted lows and highs for tomorrow are 15.57 and 17.98, respectively. 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.