Just before the markets closed on Friday, major indexes turned up to secure a series of weekly gains. The S&P 500 and the Nasdaq saw their fifth straight week of gains, the Dow seeing its third. Although momentum and bullish market sentiments have driven new investment flows into the usual places, Trump-charged stocks like financials and energy are dipping. Index averages have gained but corrections are taking place in potentially over-valuated sectors; Goldman Sachs Group (GS) has dropped 1.5% and J.P. Morgan Chase & Co. (JPM) is currently down 0.9%. Both stocks are the top two decliners in the Dow. Energy stocks took third and fourth in losses, with Exxon Mobil (XOM) and Chevron Corp (CVX) losing 0.8%.
The DJIA is currently up 0.01% at 20,822. The Nasdaq-100 is up 0.04% at 5,847 and the S&P 500 is currently trading at 2,368 which is up 0.01% from the open.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows consistent gains which build incrementally, relative to today’s conditions. Positive vector figures rise from 0.30% today toward 1% within the next ten trading sessions. Today’s support and resistance is 2,358.66 (± 3.23) and 2,373.45 (± 3.25), respectively. The predicted close today is 2,372.07.
Upcoming Events & Reports
President Trump will be giving a much anticipated address to congress on Tuesday, and investors are looking for details around his tax reform proposals.
Federal Reserve Chairwoman Janet Yellen and Vice Chairman Stanley Fischer will be speaking on Friday. Investors will be looking to lift any context from their remarks to a future decision on interest rate hikes. These will be some of the last remarks made from Fed officials before the ‘quiet period’ leading up to the next FOMC meeting.
U.S oil rig counts continue to rise, keeping per-barrel crude prices mostly stagnant. It is clear that U.S domestic drilling will continue to shape the global oil market by offsetting OPEC production cuts and likely forcing an extension on the accord. This balancing act works in favor of U.S drillers, as the bump in oil prices makes increased production more lucrative. Major OPEC members like Saudi Arabia would prefer higher oil prices toward $60, but breaching that level may spoil the market because it would incentivise U.S drillers to exponentially raise production levels. West Texas Intermediate is currently priced at $54.18 per barrel, which is up 0.41% from the open after seeing choppy trading.
Looking at USO, a crude oil tracker, our 10-day prediction model shows consistent gains after a slight dip today. Positive vector figures range between 1-2% within the next ten sessions following a predicted 0.26% drop today. The fund is currently trading at 11.50, up 0.35% from its open. Today’s prediction sees support at 11.38 (± 0.04) and resistance at 11.46 (± 0.04). The predicted close for today is 11.43.
Gold prices are up 0.50%, or $6.40 today at $1,264 a troy ounce. The perceived safe-haven metal is currently in favor due to uncertainty around President Trump’s anticipated remarks on tax reforms this Tuesday. Investors are also awaiting comments from Janet Yellen and Fed Vice Chairman Stanley Fischer. Some analysts see Trump and the Fed on diverging paths and visions for the U.S economy. Trump has indicated he wants a weaker U.S dollar, with lower interest rates. The Fed, however, would lean toward higher rates based on economic data and their sentiment toward the dollar. Uncertainty will likely remain as long as this ambiguity continues.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows consistent downward movement. Relative to today’s conditions, the negative vector values oscillate around 1% and hardly dip below 0.50%. The gold proxy is currently trading at 120.21, up 0.43%. Today’s predicted low is 118.41 (± 0.38) and the predicted high is 119.70 (± 0.38). The predicted close today is 118.56.
Investors will be hanging on the last words of Fed officials before a ‘quiet period leading up to the next FOMC meeting in March. Economic data has been mostly positive, and bullish market sentiments due to Trump have created momentum. President Trump has indicated he would like to see a weaker dollar and lower interest rates. The current market conditions and economic data would point to inflation, higher interest rates and a stronger dollar. Investors will have to wait for an eventual synthesis of opinions. The yield on the 10-year Treasury note has been erratic, currently at 2.34%.
Using the iShares 20+ Year Treasury Bond ETF (TLT) in our Stock Forecast Tool, we see slight downward movement followed by positive corrections in our 10-day prediction window. Relative to today’s conditions, we see negative movement under 0.5% for three sessions followed by positive corrections. The ETF is currently priced at $121.72, which is down 0.24% from the open. The predicted close today is 121.06 with a low and high of 120.75 (± 0.27) and 122.01 (± 0.27), respectively.
The CBOE Volatility Index (VIX) is currently up 1.05% at 11.59. Relative to today’s conditions, the 10-day prediction window shows strong upward movement. The predicted close today is 11.53 with a negative vector of 1.03%. Today’s predicted lows and highs are 11.16 (± 0.18) and 12.57 (± 0.21), respectively.
Restoration Hardware (RH) saw a 24% leap in its stock price after forecasting better-than-expected quarterly results.
Nordstrom Inc (JWN) saw its share price increase 5.7% today after showing earnings on Thursday which beat expectations.
Hewlett Packard Enterprise Co. (HPE) reported lower-than-expected sales on Thursday, and lowered its earnings projections for this fiscal year. Its stock price dropped 6.9%.
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