Nasdaq breaches 6,000 following strong earnings reports as investors digest French election results

April 25, 2017
By Vlad Karpel

Stock indexes are gaining today after a strong round of corporate earnings reports- with the Nasdaq breaking a significant barrier of 6,000. Investors are looking toward new information from the Trump administration on corporate tax reforms, following an announcement that President Trump would reveal on Wednesday a plan to cut corporate taxes by 15%. Geopolitical tensions have relaxed somewhat, and the French elections showed a first-round victory for Emmanuel Macron on Monday. Macron is favorable for global equity markets because he does not have a euroskeptic platform like far-right leader Marine Le Pen, or far-left candidate Jean-Luc Melenchon.    

The Dow is currently up 1.20%, or 249.80 points, at 21,012. The Nasdaq-100 is up 0.75% at 6,029 and the S&P 500 is currently trading at 2,389 which is up 0.15% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows slight downward movement followed by positive corrections. Today’s positive vector figure of +0.01%  dips to -0.25% in three sessions before reversing. Today’s support and resistance is 2,368.86 (± 3.55) and 2,378.35 (± 3.56), respectively. The predicted close today is 2,370.17.  



Crude oil markets are reflecting investor concern over another round of rising U.S production, which counters the OPEC global production cut agreement. This dynamic has repeatedly stoked fear of the global supply glut not being adequately depressed.    West Texas Intermediate for June delivery is currently priced at $49.42 per barrel, up 0.37% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows downward movement building incrementally. The fund is currently trading at $10.33, which is up 0.81% from the open. Today’s prediction sees support at $10.12 (± 0.05) and resistance at $10.45 (± 0.05). The predicted close for today is $10.27. Vector figures show +0.07% for today, then climb to +1.72% within three sessions. All vector figures are based on today’s market conditions.  



The price for June gold is currently down 0.86% at $1,266.50 a troy ounce. Geopolitical tension and European political anxieties, which had previously served as a supportive floor, have both eased recently. A strong round of earnings reports have drawn investors out of the perceived safe-haven asset, and a first-round victory for centrist French presidential candidate Emmanuel Macron have relaxed investors.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall positive movement. The gold proxy is currently trading at $120.26, down 1.00% from the open. Today’s predicted low is $120.70 (± 0.31) and the predicted high is $122.32 (± 0.32). The predicted close today is $121.72. Relative to today’s conditions, vector figures peak around +1.00% before easing.  



Investors are being drawn out of safe haven assets and, as a result, yields are continuing to rebound from last week’s turndown. Less geopolitical risk, a pending corporate tax reform plan from the Trump administration, strong earnings reports and reduced Frexit worries are all contributing factors. Bond prices and yields are inversely related to one another. The yield on the 10-year Treasury note is up 1.78%, currently trading at  2.31%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see positive movement following today’s slide in our 10-day prediction window. Relative to current conditions, we see vector figures moving from -0.18% today to +0.21% in three trading sessions.  The ETF is currently priced at $121.75- down 0.96% from the open. The predicted close today is $122.25 with a low and high of $122.02 (± 0.26) and $123.01 (± 0.27), respectively.  



The CBOE Volatility Index (VIX) is currently down 1.48% from the open at 10.68. Relative to today’s conditions, the 10-day prediction window shows mixed signals. The predicted close today is 11.06 with a positive vector of +0.62%. Today’s predicted lows and highs are 10.84 (± 0.22) and 12.78 (± 0.26), respectively.


Other News

U.S house prices are at their highest levels in almost three years, and new home sales hit their highest levels in almost one year in March.

Caterpillar Inc. (CAT) saw its shares rise over 7% following strong results in their reporting.

DuPoint (DD) saw a rise of 3% in share prices today following reports which beat expectations.

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