Markets trading somewhat erratic following a heavy round of earnings reports and Trump administration tax plan announcement

April 27, 2017
By Vlad Karpel

A new corporate tax plan announcement made Wednesday had introduced some degree of volatility into the markets, and today we are seeing adjustments as investors weigh the implications of the plan. One key factor that investors were looking for in this plan was an explanation of how the cuts would be funded- a detail that was not addressed in the announcement. While the vague nature of the tax plan announcement created some uncertainty, a round of corporate earnings reports were mostly strong and positive.

The Dow is currently down just 0.01%, or 1.73 points, at 20,976. The Nasdaq-100 is up 0.31% at 6,044 and the S&P 500 is currently trading at 2,388 which is down just 0.02% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows incrementally building positive movement. Today’s positive vector figure is a flat +0.00%, but climbs to +1.40% in five trading sessions and holds. Today’s support and resistance is 2,384.78 (± 3.54) and 2,397.84 (± 3.56), respectively. The predicted close today is 2,391.70.   



The continuing rise in U.S crude production is driving an atmosphere of concern and apprehension. Crude oil is consequently slipping and has sunk to a four-week low today.  Although commentary from OPEC officials repeatedly point to an extension of last November’s global production cut deal, investors are looking to U.S domestic production for more concrete indicators.  West Texas Intermediate for June delivery is currently priced at $48.43 per barrel, down 1.37% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows overall positive movement. The fund is currently trading at $10.23, which is down 0.29% from the open. Today’s prediction sees support at $10.20 (± 0.05) and resistance at $10.54 (± 0.05). The predicted close for today is $10.33. Vector figures show +0.38% for today, then climb to +2.79% within three sessions. All vector figures are based on today’s market conditions.  



The price for June gold is currently up 0.16% at $1,266.80 a troy ounce. Fluctuations in geopolitical tensions and European political anxieties have some analysts looking at a potential climb past the psychological $1,300 level in the near future. Investors also saw a report on Thursday showing one-month highs for weekly jobless benefit claims, which would push up demand for gold.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive movement followed by negative downturn. The gold proxy is currently trading at $120.36, down 0.40% from the open. Today’s predicted low is $120.70 (± 0.31) and the predicted high is $122.08 (± 0.32). The predicted close today is $121.90. Relative to today’s conditions, vector figures dip into negative territory in five trading sessions.  



Treasury prices are rising following an announcement from the European Central Bank President Mario Draghi which indicated interest rates will remain unchanged. His positive remarks for the eurozone economy also contributed to the demand for U.S. Treasury notes.  Bond prices and yields are inversely related to one another. The yield on the 10-year Treasury note is down 0.85%, currently trading at  2.29%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see overall negative movement in our 10-day prediction window. Relative to current conditions, we see vector figures moving from -0.13% today to -0.71% in four trading sessions.  The ETF is currently priced at $122.09- down 0.02% from the open. The predicted close today is $121.26 with a low and high of $121.03 (± 0.26) and $122.19 (± 0.26), respectively.  



The CBOE Volatility Index (VIX) is currently down 1.57% from the open at 10.68. Relative to today’s conditions, the 10-day prediction window shows strong positive movement. The predicted close today is 11.17 with a positive vector of +4.78%. Today’s predicted lows and highs are 10.70 (± 0.23) and 12.06 (± 0.26), respectively.


Other news

Following the market close today, we will see earnings reports from Alphabet Inc. (GOOG) (GOOGL), Microsoft Corp. (MSFT), Inc. (AMZN) and Starbucks Corp. (SBUX).


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