Market participants have a sparse amount of economic indicators to inform activity at the start of this week, so risk-assets are under scrutiny against the potential effect of hawkish central bank commentary on bond yields. Crude oil markets are also in focus, with uncertainty around prices being able to pull out of a recent downturn. A waylaid healthcare bill has also contributed to diverting focus to ancillary market signals. Today, a decline in energy and financial stocks was offset by a rise in tech shares which created flat movement for the S&P 500 index.
Today will see a release of consumer credit data, however, which is scheduled for 3 p.m. Eastern Time. This Wednesday and Thursday will see Federal Reserve Chairwoman Janet Yellen providing a monetary policy report to Congress.
The DJIA is currently up 0.03%, or 7.34 points, at 21,426.74. The Nasdaq-100 is up 0.23% at 6,167.80 and the S&P 500 is currently trading at 2,428.92 which is up 0.14% from the open.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows overall negative signals. Today’s positive vector figure of +0.12% retreats to -0.24 within three trading sessions. Today’s predicted support and resistance is 2,411.92 (± 3.80) and 2,429.71 (± 3.83), respectively. The predicted close today is 2,424.20. 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.
Crude oil prices remain near lowest levels in recent weeks, as output grew from Libya and Nigeria. The two countries are OPEC members, but are exempt from the global production cut accord due to their own respective ongoing political upheaval. Demand has also dropped amidsts growing output, so inventories are currently higher than required. A recently strengthened U.S dollar has also been a contributing factor to crude price declines. OPEC is now reportedly considering a cap on production from Libya and Nigeria. U.S domestic production is also continuing unabated as both production and rig counts have increased last week. After hitting a two-week low of $43.65, West Texas Intermediate for August delivery is currently priced at $44.65 per barrel, up 0.70% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows initial downward movement followed by positive signals. The fund is currently trading at $9.16, which is up 0.62% from the open. Today’s prediction sees support at $8.90 (± 0.06) and resistance at $9.31 (± 0.06). The predicted close for today is $9.05. Vector figures show -0.12% for today, which reverse to +0.37 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.
The price for August gold is currently up 0.21% at $1,212.40 a troy ounce. The yellow metal is recuperating from recent losses due to an upbeat jobs report released last week. If future economic data beats expectations and verifies hawkish central bank commentary, a rise in bond yields and a strengthened U.S dollar will continue to put downward pressure on gold prices. The sum of these factors may test the $1,200 level within coming weeks. Gold becomes less attractive to investors holding foreign currencies when U.S dollar is strengthened, as it is priced in that currency.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals and volatility. The gold proxy is currently trading at $115.30, up 0.02% from the open. Today’s predicted low is $115.26 (± 0.32) and the predicted high is $116.61 (± 0.32). The predicted close today is $115.79. 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.
Treasury yields are scaling back today after some commentary from the European Central Bank appeared to indicate a slow down in the immediacy of the ECB tapering its bond-buying program. This would create some uncertainty around U.S and European bond markets falling out of synchronization. Janet Yellen’s policy statements to Congress this week will also be scrutinized; analysts are concerned that a repetition of the Fed’s insistence that a slowdown in inflation is only transitory and that a 2% target will be reached in coming quarters will have an adverse effect on the bond markets. The yield on the 10-year Treasury note is currently down 0.04% at 2.37%. Bond prices and yields are typically inversely related to one another.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see strong negative signals in our 10-day prediction window. Today’s vector figures move from -0.43% to -1.97% in three trading sessions. The ETF is currently priced at $122.78- up 0.05% from the open. The predicted close today is $121.94 with a low and high of $121.66 (± 0.23) and $122.72 (± 0.24), respectively. 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.
The CBOE Volatility Index (VIX) is currently down 2.41% at 10.92, and our 10-day prediction window shows overall positive signals. The predicted close today is 11.29 with a positive vector of +1.14%. Today’s predicted lows and highs are 11.12 (± 0.22) and 12.15 (± 0.24), respectively. 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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