U.S Stocks climb following another slide in tech shares and Treasury yields see gains following commentary from ECB President Mario Draghi

June 28, 2017
By Vlad Karpel

Major U.S indexes are rebounding from a significant drop in the previous trading session, with financials notching in as top performers. A delay has been set for voting on the Trump administration’s health care bill until July 4, which is reviving investor uncertainty around passing further agenda items by President Trump. A highly anticipated infrastructure spending bill, tax cuts and business deregulation were all driving factors in the post-election rally, so markets are in wait-and-see mode. The Nasdaq-100, a tech-saturated index, is making a return from previous dips.

The DJIA is currently up 0.78%, or 165.82 points, at 21,476. The Nasdaq-100 is up 0.97% at 6,207 and the S&P 500 is currently trading at 2,440 which is up 0.85% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  overall negative signals. Today’s negative vector figure of -0.04% shifts to positive movement in the next trading session before reverting back to downward vector figures. Today’s predicted support and resistance is 2,419.38 (± 4.22) and 2,446.36 (± 4.26), respectively. The predicted close today is 2,425.84. 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.   

 

Oil

Crude oil prices are seeing a rise today due to a considerable weekly drop in U.S. production figures. Most analysts are looking at the decline as a temporary event, likely due to last week’s tropical storm in the Gulf of Mexico. These gains are offset by a rise in U.S. supplies, however.  Recent comments from U.S. Energy Secretary Rick Perry regarding the rise in U.S output has injected further concern over the long-term impacts on the global crude oil market. Although Perry lauded the rise in output as a positive boon for the domestic oil industry, analysts conclude this will eventually cause harm to shale producers because it will dampen the price-per-barrel.  West Texas Intermediate for August delivery is currently priced at $44.52 per barrel, up 0.75% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows consistent downward movement. The fund is currently trading at $9.18, which is up 0.93% from the open. Today’s prediction sees support at $8.89 (± 0.05) and resistance at $9.10 (± 0.05). The predicted close for today is $9.01. Vector figures show -0.31% for today, moving to -1.20% within three trading 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.   

 

Gold

The price for August gold is currently up 0.23% at $1,250.50 a troy ounce. Gold prices are seeing a slight rebound in light of a weakened U.S dollar, but the drive upward was halted by rising Treasury yields. Gold becomes more attractive to investors holding foreign currencies when U.S dollar is weakened, as it is priced in that currency. Treasury yields also tend to have an inverse effect on gold, as higher yields make risk assets more attractive to investors in comparison to the perceived safe-haven asset which provides no yield.  

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive movement followed by late negative corrections. The gold proxy is currently trading at $118.77, down 0.03% from the open. Today’s predicted low is $118.29 (± 0.28) and the predicted high is $119.69 (± 0.28). The predicted close today is $118.66. 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.   

 

Treasuries

Treasury yields saw the biggest gains since the June 14 Federal Reserve policy statement in the previous trading session, due to comments from ECB President Mario Draghi. His remarks are indicating to many that the European Central Bank will be tapering off its quantitative easing program toward the end of this year.  The yield on the 10-year Treasury note is currently up 0.35% at 2.22%. 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 building positive movement in our 10-day prediction window. Today’s vector figures move from +0.17% to +0.52% in three trading sessions.  The ETF is currently priced at $126.36- down 0.42% from the open. The predicted close today is $127.49 with a low and high of $126.89 (± 0.25) and $128.04 (± 0.26), 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.

 

Volatility

The CBOE Volatility Index (VIX) is currently down 7.87% at 10.19, and our 10-day prediction window shows overall negative signals. The predicted close today is 10.81 with a positive vector of +0.83%. Today’s predicted lows and highs are 9.44 (± 0.27) and 11.25 (± 0.33), 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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