After an impressive round of earnings reports, we’re seeing that corporate America is showing good signs of vitality without the aid of fiscal stimulus. One possible downside to this situation is that higher valuations come from the perspective that markets will see future growth following proposed tax cuts. Four interest-sensitive sectors to keep an eye on now are TLT, REITS, forex and banks. A monetary policy decision from the European Central Bank tomorrow is sure to have an effect in those areas. Although investor sentiment around corporate performance is up, it could be even better without gridlock in Washington. It’s been announced that a vote on the GOP health care bill has been cancelled after several Republicans signaled they would not support it.
On a personal note, I’ve been staying at my Miami home with my family and teaching my son David how to swim! He’s not even 2 yet, but he’s learning so quickly. Amazing how advanced our kids are compared to my generation. In no time he’ll be learning to trade options! Let’s take a look at some of these earnings reports now. Financials have done well and shares of Morgan Stanley (MS) rose 2.5% after its reported earnings and revenue beat expectations. Railroad operator CSX Corp. (CSX) gave up 5.6% in its share price today as investors are raising questions around its better-than-expected earnings results yesterday. Railroads, along with United Continental Holdings Inc. (UAL), dragged down the Dow Jones Transportation Average- the index dropped 83 points. Netflix Inc. (NFLX) boosted the tech-saturated Nasdaq index to a record close yesterday after reporting excellent earnings on Monday.
The DJIA is currently up 0.17%, or 35.97 points, at 21,608.88. The S&P 500 hit an intraday record today and is currently trading at 2,470- up 0.40% from the open. The Nasdaq-100 is up 0.64% at 6,385.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows overall positive signals. Today’s positive vector figure of +0.21% moves to +0.73% within three trading sessions. Today’s predicted support and resistance is 2,468.58 (± 3.90) and 2,476.34 (± 3.92), respectively. The predicted close today is 2,472.73. 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 are making reaches higher today following U.S domestic inventory data which showed a third weekly decrease in supplies. U.S production, however, continues to grow. West Texas Intermediate for August delivery is currently priced at $46.89 per barrel, up 1.31% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows negative movement followed by positive corrections. The fund is currently trading at $9.71, which is up 1.78% from the open. Today’s prediction sees support at $9.47 (± 0.07) and resistance at $9.63 (± 0.07). The predicted close for today is $9.48. Vector figures show -0.25% for today, moving to -0.49% in four sessions before showing positive signals. 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 down 0.02% at $1,241.80 a troy ounce. A main driving factor to this move is a recuperating U.S dollar index, which previously sank to a 10-month earlier in the week. Uncertainty around the feasibility of a market-friendly policy push in Washington had dragged the dollar down, but strong earnings reports have brought the index back.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall mixed signals. The gold proxy is currently trading at $118.04, down 0.06% from the open. Today’s predicted low is $117.02 (± 0.32) and the predicted high is $118.11 (± 0.32). The predicted close today is $117.20. 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.
Treasury yields are fluctuating amidst investor anxiety around the feasibility of passing pro-growth agenda items by the Trump administration. A cancelled vote on the health-care bill is being looked at as an indicator of the current state of Washington politics. Strong earnings reports, however, have boosted sentiments. The yield on the 10-year Treasury note is currently up 0.47% at 2.27%. 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 signals in our 10-day prediction window. Today’s vector moves from +0.12% to +0.64% in three trading sessions. The ETF is currently priced at $124.84- up 0.07% from the open. The predicted close today is $124.80 with a low and high of $124.30 (± 0.25) and $124.93 (± 0.25), 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 2.12% at 9.68, and our 10-day prediction window shows strong negative signals. The predicted close today is 8.86 with a negative vector of -5.98%. Today’s predicted lows and highs are 7.81 (± 0.17) and 10.17 (± 0.22), 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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