Investors are looking at potential over-valuations in the markets, with financials seeing big losses Monday. Deutsche Bank announced recently that it will attempt to raise $8.5 billion in a share sale as part of a restructuring plan. Geopolitical concerns have also factored in, which include North Korea’s ballistic missile test and France’s presidential elections. Commodities have wavered, and many are looking toward typically perceived safe assets for the time being. Bonds, gold and the yen all gained in early intraday trading. A lack of details around policy plans from the U.S. administration has raised concerns, on top of another unsubstantiated accusation from President Trump on Saturday. His claim that former President Barack Obama personally ordered a wiretap on his phones has been strongly repudiated by senior intelligence officials and the FBI. Disarray in the administration causes concern with investors who are still awaiting progress on pro-growth policy and agendas.
The DJIA is currently down 0.42% at 20,917.79. The Nasdaq-100 is down 0.71% at 5,829.13 and the S&P 500 is currently trading at 2,368.52 which is down 0.61% from the open.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows consistent positive signals relative to today’s conditions. Upward vector figures climb from 0.23% today toward 1% within the next ten trading sessions. Today’s support and resistance is 2,381.30 (± 3.73) and 2,392.92 (± 3.75), respectively. The predicted close today is 2,387.70.
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U.S nonfarm payroll figures will be released this Friday, which would inform the chances of Fed interest rate hikes as well as U.S dollar strength.
Crude oil continues to hover in the mid-$50s range, as the dynamics between OPEC’s global production cut deal and rising U.S domestic production creates a temporary equilibrium. The next major event in this market is an end-of-May OPEC meeting, where members will decide on an extension of the existing accord. West Texas Intermediate is currently priced at $53.37 per barrel, up 0.08% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows strong positive signals. Positive vector figures above 1% remain for today and the next two trading sessions before dropping off. The fund is currently trading at 11.28, which is down 0.09% from the open. Today’s prediction sees support at 11.29 (± 0.04) and resistance at 11.57 (± 0.05). The predicted close for today is 11.45.
Gold prices are up 0.08%, or $1.00 today at $1,227.50 a troy ounce. The perceived safe-haven metal is proving attractive to investors during the temporary market uncertainty around valuations and geopolitics. Apart from uncertainty around the condition of the Trump administration, there are concerns surrounding France’s political climate in the upcoming elections. A win for Marine Le Pen and the far-right would create an atmosphere of euroscepticism and a potential referendum on France’s EU membership. This would disrupt global trade and place the Euro in jeopardy. Although concerns are high, polls still show a strong victory for Emmanuel Macron, a former investment banker.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows slight volatility for gold prices. Relative to today’s conditions, the positive vector values oscillate below 1% with weak intermittent negative corrections. The gold proxy is currently trading at 116.89, down 0.53%. Today’s predicted low is 117.11 (± 0.32) and the predicted high is 118.32 (± 0.33). The predicted close today is 117.76 with a vector value of +0.44%.
Treasury bond prices have gained today, driving yields down after a North Korean ballistic missile test saw three missiles land inside Japan’s Exclusive Economic Zone. The yield on the 10-year Treasury note is up 0.69% at 2.49% after declining 1.1 basis points today. French presidential election worries had also factored into this risk-averse behavior. Former French Prime Minister Alain Juppe won’t replace candidate Francois Fillion, who’s recently suffered a scandal. This emboldens his rival, far-right candidate Marine Le Pen, which has investors worried about economic impacts on global trade and the EU.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see initial positive movement followed by downward corrections in our 10-day prediction window. Relative to today’s conditions, we see positive vector hovering around 0.50% before dropping in the last four trading sessions. The ETF took is currently priced at $118.71- down 0.54% from the open. The predicted close today is $119.46 with a low and high of 118.49 (± 0.38) and 120.36 (± 0.39), respectively.
The CBOE Volatility Index (VIX) is currently up 5.93% at 11.61. Relative to today’s conditions, the 10-day prediction window shows a spike in the next trading session followed by consistent negative signals. The predicted close today is 11.22 with a negative vector of 1.36%. Today’s predicted lows and highs are 10.96 (± 0.19) and 12.06 (± 0.20), respectively.
General Motors Co. (GM) saw its share price drop 2.1% following news that the automaker will be selling its underperforming European business units which include Opel and Vauxhall. The deal would amount to $2.3 billion as well as an accounting charge of $4 to $4.5 billion.
Deutsche Bank AG (DBK) saw its U.S stock price fall 3.7% today upon news of its attempt to shore up $8.5 billion from a share sale as part of a restructuring plan.
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