Markets to reveal economic outlook, oil volatility and holiday shopping trends.

November 28, 2016
By Vlad Karpel

Today is Cyber Monday, but in many cases, it’s been a Cyber Weekend and stock figures are showing as such. We see major traditional retailers selling off but online retailers and shipping giants gain. You may have noticed reduced crowds and less news of door-busting shopping frenzies this year. That’s because most have opted to stay home and take advantage of a general move toward placing deals outside of brick-and-mortar.

As an example, the WSJ U.S Transportation & Logistics Index is up 0.40% which would account for even heavier online holiday shopping activity. Amazon (AMZN), although currently down 1.33% today, is seeing a 13.5% year-to-date rise. Traditional retailers are expectedly down today. Macy’s (M) is down 1.88% at $43.31, Target is down 0.99% $77.83 and Best Buy has dropped 2.68% $43.33.

DJIA is slowing and correcting its breach of 19000 last week, according to new futures activity. The Dow’s futures sank 59 points to 19,085 and continuing its pace. Both the S&P 500 and Nasdaq-100 futures pulled back 0.3% to 2,204.25 and 4,858, respectively. Following suit, the DJIA is down 0.24% to 19105.54. The S&P 500 and Nasdaq-100 are both down 0.26% at 2207.54 and 5384.71, respectively.  

Pending manufacturing data to signal economic vitality

This coming week, many analysts are looking toward a series of manufacturing reports; the Chicago PMI gauge for November will be released on Wednesday, while Markit and the Institute of Supply Management will show their own figures on Thursday.

This data will give more context to economic outlooks, creating finer definitions from recent speculations and political news. It is expected that these numbers will contribute to a wider post-rally drawdown, balancing Trump euphoria with current realities.  


Gold is once again gaining amidst uncertainty and a US dollar pullback. The non-fiat metal is serving as a temporary hiding place with an 11 point, 0.93% jump to $1192 today. Saudi posturing toward non-OPEC members, particularly Russia, is having its intended effect and injected last-minute anxiety ahead of Wednesday’s meeting. Upcoming economic data, such as PMI indexes, will likely dampen the Trump effect as we get a closer look at recent economic data. This is currently depleting the US dollar against the Japanese yen.  

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, we see negative vectors holding until November 30th and then beginning to reverse upward. It is currently trading at 113.3 which is up 0.07, or 0.61%. Today’s predicted close is at 111 with a predicted low of 110.48 (± 0.41) and a predicted high of 112.61 (± 0.42) .




The CBOE Volatility Index (VIX) has shot up over the weekend, likely due to uncertainty around oil and pending economic data. The VIX is trading at 13.16 with slight gains predicted. Our 10-day prediction model shows consistent upward vectors, getting heavier around December 5th. Intraday figures show the index dropping after its spike, and the predicted close is 12.92. Predicted 10-day figures show resistance ranging between ~13 and ~15. Predicted support stays between ~12 and ~14.




Uncertainty is rife within the Organization of Petroleum Exporting Countries, but many expect a production cap agreement at the Wednesday meeting. Russia, although not an OPEC member, has been showcasing their positions and hopes for a cap. This past Friday, crude futures saw a 4% drop after a Saudi refusal to meet with Russian counterparts. The two were to discuss possible production cuts, which Russia would benefit from, considering their current deficits and overall dependence on oil revenue.

Some speculate the Saudi refusal to engage with non-OPEC members prior to member consensus can be reduced to a negotiating tactic. Putting a different spin on the situation, Iraq has just declared its intended cooperation with OPEC. Regardless, it is widely assumed that the consequence of neglecting a production cap- abysmal per-barrel prices around $30- will guide decisions.

Looking at USO, a crude oil tracker, our 10-day prediction model still shows consistent upward vectors, rising from ~1% to ~10% by December 9. The fund is climbing back from last week’s speculative dip, trading at 10.49, up 1.55% from its open. Today’s prediction sees support at 10.33 (± 0.06) and resistance at 10.71(± 0.06). The predicted resistance and support points to 11.61 and 11.38, respectively, at the end of the window.



In other news

Samsung is being pressed by activist investor Elliott Holdings, a hedge fund, to split into two separate companies. The South Korean electronics giant announced it will address this by the end of this month.

Another target of Elliott Holdings is Cognizant- one of the largest IT services firms in the world. Eliott is proposing a $2.5 billion buyback plan, in which Cognizant would begin to pay dividends back to shareholders. They posit that the firm should slow down expansion, without cutting costs or employees, and reconfigure their targets and margins.

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