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Today’s trading is seeing the DJIA on path to continue its streak of record closes, following last week’s 22,000 milestone. The markets are digesting a round of strong earnings reports, low-inflation conditions, a strengthening dollar and rising treasury yields. At the moment, there are few roadblocks to equities pushing higher and following the path of least resistance. Save for Friday’s consumer-price report, there won’t be much significant economic data this week and earnings reports have tapered off. Investors may be more attuned to geopolitical news, this week’s OPEC meeting, and Fed commentary. Over the weekend, China backed a new round of U.N. sanctions on North Korea which will raise tensions in the region. North Korea has indicated a willingness to hold talks with the U.S. “if conditions were right”. Secretary of State Rex Tillerson’s comments today framed that dynamic by insisting talks are only possible with the halt of DPRK ballistic missile tests.
A review of member-country compliance with OPEC’s global production-cut deal for late 2016 will be taking place in Abu Dhabi this week. This will be informative in terms of the effectiveness of the deal, compliance levels in the past and willingness to comply in the future- including Russia. Commentary from Fed officials and a consumer-price data report on Friday will inform markets around inflation and the timeline for a rate hike.
The DJIA is currently up 0.04%, or 18 points, at 22,111.03. The S&P 500 is currently trading at 2,479.50- up 0.11% from the open. The Nasdaq-100 is up 0.45% at 6,379.44.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows slight but overall negative signals. Today’s negative vector figure of -0.10% moves to -0.29% within three trading sessions. Today’s predicted support and resistance is 2,465.78 (± 2.79) and 2,479.02 (± 2.80), respectively. The predicted close today is 2,473.78. 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.
Must-buy Stocks for Tuesday
Based on our Stock Forecast Toolbox’s 10-day prediction data, we’ve found 2 great candidates of interest. They are:
Intel Corp. (INTC)
Following a much stronger-than-expected Q2 earnings report. Intel shares are surging and poised to climb higher as the stock is relatively valued lower than most of its peers.
Our 10-day prediction model shows incrementally building positive signals. The stock is currently trading at $36.37, up 0.19% from the open with a +0.64% vector figure for today. Tomorrow’s prediction shows an open price of $37.14, a low of $36.72 and a high of $37.20. The predicted close for tomorrow is $36.97. Vector figures show +1.81% for tomorrow. 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.
PulteGroup, Inc. (PHM)
PulteGroup, a massive U.S homebuilder which has beat or met expectations in the past four quarters, released another strong report for Q2. Land sale revenue, net new orders and the value of net new orders have all increased since the same quarter of last year.
Our 10-day prediction model shows incrementally-building positive signals. The stock is currently trading at $25.45, which is down 0.59% from the open- but is showing a +0.80% vector figure for today’s session. Tomorrow’s prediction shows an open price of $25.72, a low of $25.68 and a high of $26.15. The predicted close for tomorrow is $25.87. Vector figures show +1.44% for tomorrow. 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 trading lower today ahead of another OPEC meeting in Abu Dhabi focused on reviewing member-countries’ compliance in 2016. Prices are reflecting current investor uncertainty around past and future compliance with production cuts, as well as anticipation of OPEC’s monthly report on Thursday. This meeting may also determine whether or not Libya, a significant African producer previously exempt from the output-cap deal, will be included in the accord. As summer travelling season is winding down, so will the bump in demand which often causes a dip in crude prices. West Texas Intermediate for September delivery is currently priced at $48.95 per barrel, down 1.27% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows overall negative signals. The fund is currently trading at $10.02, which is down 1.04% from the open. Today’s prediction sees support at $9.88 (± 0.06) and resistance at $10.22 (± 0.06). The predicted close for today is $10.09. Vector figures show +0.03% for today, moving to -1.90% 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.
Gold
The price for December gold is currently down 0.02% at $1,263.80 a troy ounce. Strong earnings, high-performing stocks and better-than-expected jobs data is making risk-assets more attractive currently. As more data indicates a strengthening economy or market-friendly conditions, it is likely that investor sentiment will grow more optimistic about interest rate hikes and a reduction in the Fed balance sheet. This, in turn, makes the non-yield bearing asset less attractive for investment.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows consistent negative signals. The gold proxy is currently trading at $119.65, trading flat from the previous close. Today’s predicted low is $119.40 (± 0.24) and the predicted high is $120.10 (± 0.24). The predicted close today is $119.41. 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 are continuing to hold steady as investors await a Friday consumer-price data report as well as scheduled Fed commentary this week. Although a rate hike is anticipated by the end of this year, the immediacy of the change is being questioned and the answer will be informed by inflation conditions. The yield on the 10-year Treasury note is currently up 0.03% at 2.25%. 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 mixed signals in our 10-day prediction window. Today’s vector of -0.41% eases and reverses into positive trajectories within four trading sessions. The ETF is currently priced at $125.00- up 0.06% from the open. The predicted close today is $124.09 with a low and high of $123.68 (± 0.30) and $124.93 (± 0.31), 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 0.80% at 9.95, and our 10-day prediction window shows strong positive signals. The predicted close today is 10.17 with a positive vector of +0.23%. Today’s predicted lows and highs are 9.87 (± 0.18) and 10.71 (± 0.20), 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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