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The stock market closed mixed on Monday, as traders eagerly awaited key economic data and comments from Federal Reserve Chairman Jerome Powell later this week. Both are expected to have significant implications for interest rates and stocks. The Dow and S&P managed to hold onto gains while the Nasdaq finished in the red. Key reports this week include Consumer Credit, ADP Employment, U.S. Trade Balance, and the latest Beige Book.
This week, investors will be closely focused on Powell’s congressional testimony, which will take place on Tuesday before the Senate Banking Committee and the House Financial Services Committee on Wednesday. The primary topic of discussion will be monetary policy, and the market will be keen to pick up any hints about the Fed’s future interest rate moves. Currently, the expectation is that the Fed will raise the ultra-short-term federal funds rate a few more times before pausing soon. Higher rates are meant to reduce inflation by decreasing economic demand, which has caused concern among investors. While the rate of inflation has been decreasing, it has not been happening quickly enough for the Fed to stop raising interest rates.
On Friday, the February employment report is set to be released, with economists predicting that 225,000 jobs will have been added, down from January’s result of 517,000. A decrease would be welcome news for markets, as it would indicate an economy weak enough to support further decreases in inflation yet still strong enough to avoid a severe recession.
The VIX is currently trading near the $18 level, and earnings reports from companies such as CRWD, ORCL, and DOCU this week, along with Powell’s hearing, could influence the market’s next move. The market’s overhead resistance levels are currently at $408 and $418, with support levels at $402 and $395. Experts predict that the market will trade sideways for the next two to eight weeks and encourage readers to hedge their positions and remain market-neutral at this time. Globally, both Asian and European markets closed to mixed results. Market commentary readers should maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
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 the 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.
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West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $80.49 per barrel, up 1.02%, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $70.49 at the time of publication. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The price for the Gold Continuous Contract (GC00) is down 0.12% at $1852.40 at the time of publication.
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 trading at $171.62 at the time of publication. Vector signals show +0.84% for today. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The yield on the 10-year Treasury note is up at 3.965% at the time of publication.
The yield on the 30-year Treasury note is up at 3.900% 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 mixed signals in our 10-day prediction window. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The CBOE Volatility Index (^VIX) is $18.61 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
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