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Major U.S. indices retreated in early morning trading following last week’s impressive gains. The latest June employment reports produced impressive numbers and lowered investor-confidence for interest-rate cuts. Look for Fed Chair Jerome Powell to speak later this week as well as last month’s FOMC minutes to be released Wednesday, providing some guidance on future Fed action and market direction. This week remains relatively light on earnings releases, PepsiCo second-quarter earnings are due tomorrow, while Federal budget and core CPI for the month of June are due Thursday. Although slightly down compared to last week, SPY remains near all-time highs and we encourage Market Commentary readers to avoid chasing near $298 and consider buying closer to $290 level. Depending on several geopolitical factors we could see some volatility, however, we do not see last week’s market momentum pushing SPY above $300, potentially overshooting to $305. For reference, the SPY Seasonal Chart is shown below:
After last week’s multi-day streak in the green for major U.S. indices, all three are on track to close in the red today. The pullback could be mainly attributed to the higher than expected jump in labor data reported last week which cooled investor expectations for a Fed rate cut. Still, investors will look to Powell’s comments later this week for an indication of where the Fed could be headed. The U.S. job market added over 220,000 jobs in June, impressively topping the 170,000 number most economists predicted. Unemployment remained near a 50-year low and was mostly flat for the previous month. Besides an interest rate cut or any further news from the Fed, the next most likely factor to create volatility in the market could be any reported progress or regression between the U.S. and China. Currently, both sides agreed to halt additional tariffs will an agreement continues to be worked on. Asian markets closed significantly lower while European markets were modestly down.
This week’s earnings load remains light with only a few major corporate names reporting. Delta, Bed Bath & Beyond, and Levi are due this week along with PepsiCo set to report on Tuesday. Look for May job openings data to release tomorrow while Wednesday we will see FOMC minutes as well as wholesale inventories. Several major Fed members will speak this week including Powell, Randal Quarles, James Bullard, and New York Fed President John Williams. On Thursday, Core CPI and Federal Budget data for June are set to release.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of-0.23% moves to -0.86% in five trading sessions. 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.
On June 28th, our ActiveTrader service produced a bullish recommendation for CenturyLink Inc (CTL). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
CTL entered its forecasted Strategy B Entry 1 price range $11.64 (± 0.09) in its first hour of trading and passed through its Target price $11.76 in the fifth hour of trading that day. The Stop Loss price was set at $11.52.
*Please note: At the time of publication we do not own the featured symbol, GS. Our featured symbol 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 symbol for Tuesday is Goldman Sachs Group (GS). AFL is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
The stock is trading at $205.56 at the time of publication, with a +0.63% 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 Crude Oil delivery (CL.1) is priced at $57.95 per barrel, up 0.80% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly negative signals. The fund is trading at $12.01 at the time of publication, up 1.00% from the open. Vector figures show +0.12% today, which turns -1.68% 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 the Gold Continuous Contract (GC00) is down 0.10% at $1,398.50 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $131.84, at the time of publication. Vector signals show +0.45% 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 down 0.39% at 2.703% at the time of publication. The yield on the 30-year Treasury note is down 1.00% at 2.52% 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 +0.22% moves to +0.50% 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 up 6.78% at $14.18 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $14.19 with a vector of +6.10%. 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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