Geopolitical jitters and Washington miasma cloud an otherwise stable outlook

August 21, 2017

By Vlad Karpel

Geopolitical tensions kick back into high gear as military exercises between the U.S and South Korea begin today. Stocks are trading choppy today and markets are reverting back to a wait-and-see holding pattern. Domestic U.S political roadblocks are hanging over a series of tasks in Washington, clouding lawmakers’ optimism for getting them done. Among those are raising the debt ceiling, passing a budget and developing tax reform. Investors won’t be seeing significant economic data this week, but a string of earnings reports are due from the retail sector.

The DJIA is currently up 0.05%, or 10.41 points, at 21,684.50. The S&P 500 is currently trading at 2,427.44- up 0.08% from the open. The Nasdaq-100 is down 0.15% at 6,206.95.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows initial positive movement followed by negative signals. Today’s positive vector figure of +0.20% moves to -0.11% within four trading sessions. Today’s predicted support and resistance is 2,425.55 (± 3.41) and 2,446.14 (± 3.44), respectively. The predicted close today is 2,435.85. 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.

Must-buy Stocks for Tuesday

Based on our Stock Forecast Toolbox’s 10-day prediction data, we’ve found 2 great candidates of interest. They are:

Visa Inc. (V)

After Visa beat their expected Earnings-per-share figures for 2Q17, the stock is showing high propensity for bullish movement in our toolbox.

Our 10-day prediction model shows initial downward movement followed by incrementally building positive signals. The stock is currently trading at $102.99, up 0.47% from the open with a -0.33% vector figure for today. Tomorrow’s prediction shows an open price of $101.08, a low of $100.60 and a high of $102.78. The predicted close for tomorrow is $102.63. Vector figures show -0.63% for tomorrow, but reverse into strong positive territory above +1.10% within two more 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.

Stryker Corp. (SYK)

Medical device company Stryker Corp. is poised to make substantial gains as it continues to outperform its industry category, hold a diverse portfolio of products and grow with acquisitions.

Our 10-day prediction model shows a window of opportunity with positive movement before a negative downturn. The stock is currently trading at $144.56, which is up 0.18% from the open. Tomorrow’s prediction shows an open price of $145.58, a low of $143.64 and a high of $147.05. The predicted close for tomorrow is $144.54. Vector figures show +0.36% for tomorrow and holds positive for four 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.

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Oil

Crude price are reflecting investor uncertainty as the conclusion of an OPEC meeting is anticipated later today. The meeting is being held with OPEC members outside of the cartel and will revolve around compliance levels for the global production cut accord struck last year. The next data release from the Energy Information Administration is due this Wednesday, which will show whether or not U.S inventories have continued to decline from last week. Analysts cite the winding down of seasonal demand as a motivator to build up supplies again, although Baker Hughes reported a 5-rig decrease in active drilling last week. West Texas Intermediate for September delivery is currently priced at $48.00 per barrel, down 1.30% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows overall negative signals. The fund is currently trading at $9.76, which is down 2.11% from the open. Today’s prediction sees support at $9.64 (± 0.03) and resistance at $10.04 (± 0.03). The predicted close for today is $9.86. Vector figures show +0.79% for today, but reverse to -0.49% 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.

Gold

The price for December gold is currently up 0.35% at $1,297.40 a troy ounce. Three major factors have caused the perceived safe-haven to pass the $1,300 mark on Friday and climb back toward that level today. The terrorist attack in Barcelona, Spain last week disrupted markets and drove investment in gold, and the sustained volatile political atmosphere in Washington following the Charlottesville, Virginia events has injected substantial concern over President Trump’s capability to pass pro-growth agenda items. The third factor is today’s initiation of U.S./South Korean military exercises, which are being met with fiery rhetoric from North Korea as is tradition.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is currently trading at $122.62, up 0.27%. Today’s predicted low is $121.35 (± 0.25) and the predicted high is $122.72 (± 0.25). The predicted close today is $121.44. 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.

Treasuries

Investors are in wait-and-see mode ahead of Thursday’s Federal Reserve symposium in Jackson Hole, Wyoming. The event will conclude on Saturday and by that time, market participants will get an address from Fed Chair Janet Yellen which will be parsed for any shifts in central bank thinking. The yield on the 10-year Treasury note is currently down 0.16% at 2.19%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see overall mixed signals in our 10-day prediction window. Today’s vector of -0.18% sees a reversal tomorrow to positive signals which holds for three sessions, before another downturn. The ETF is currently priced at $126.66- up 0.03% from the open. The predicted close today is $126.46 with a low and high of $126.26 (± 0.57) and $126.76 (± 0.26), 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 currently down 5.68% at 13.45, and our 10-day prediction window shows strong negative signals. The predicted close today is 14.14 with a negative vector of -1.78%. Today’s predicted lows and highs are 13.33 (± 0.32) and 14.61 (± 0.35), 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.