Will strong economic data push markets through Harvey and North Korea jitters this week?

The markets are seeing a rebound from Tuesday’s selling activity, following another North Korean provocation which saw several missiles break Japanese airspace. The corrective rally is due to the typical pattern of investors buying on the downtrend. Heading toward an extended Labor Day weekend, market activity is less volatile and investors are in wait-and-see mode amidst upcoming economic data and uncertainty around geopolitical tensions around the Korean peninsula. We’re seeing positive economic news today in the form of an ADP Employment Change report which indicated private-sector jobs rose by approximately 237,000 and July’s data was revised to 201,000 from an original figure of 178,000. Q2 GDP figures showed an annual rate increase of 3.0% as well. While this news provides a good indicator ahead of more economic reports this week, it adds a degree of uncertainty because the data may cause the Fed to re-evaluate its timeline for a rate hike.  

The DJIA is currently up 0.18%, or 38.44 points, at 21,904. The S&P 500 is currently trading at 2,458- up 0.50% from the open. The Nasdaq-100 is up 1.01% at 6,365.

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 +0.06% sees a negative correction in the next two trading sessions before returning to an uptrend. Today’s predicted support and resistance is 2,445.53 (± 3.56) and 2,450.91 (± 3.57), respectively. The predicted close today is 2,446.16. 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.  

Highlight of a Recent Winning Trade

We’re seeing a strong performance in today’s ActiveTrader stock trade recommendation list- particularly for the SPDR S&P Metals & Mining ETF (XME). Our ActiveTrader service is designed for day-trading.

Trade Breakdown

We recommended a primary entry price of $31.89 (± 0.11) and set a secondary entry of $31.73 (± 0.11) in the case of the stock pulling back. The primary entry range was hit and XME shortly after the open is currently trading above our target price of $32.21. We set a stop-loss price of $31.57 to prevent the stock from running away from us. The ETF is looking to close at a healthy profit today. ActiveTrader recommendations are intended for positions held for 1-5 days, or until target or stop-loss prices are hit.

Must-buy Stocks for Thursday

Based on our Stock Forecast Toolbox’s 10-day prediction data, we’ve found a great candidate of interest.

Steel Dynamics (STLD)

Steel producers are seeing a boost in share prices today following the effects of Hurricane Harvey. Houston is a significant hub for U.S steel imports and exports, and the demand for steel products has not changed. We’re also seeing drops in Chinese exports coming into the U.S., which has been a commercial obstacle for U.S. producers.

Our 10-day prediction model shows consistent positive vector signals. The stock is currently trading at $34.91 with a +1.16% vector figure for today. Tomorrow’s prediction shows an open price of $34.83, a low of $34.29 and a high of $35.56. The predicted close for tomorrow is $35.05. Vector figures show +1.70% 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.   

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Oil

Although investors are seeing a weekly drop in U.S. stockpiles, crude oil futures lost some ground today as the real effects of Hurricane Harvey are not captured in the data. The lag in data to real events will likely see heightened volatility in crude and gasoline markets.  West Texas Intermediate for October delivery is currently priced at $46.64 per barrel, up 0.09% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals with a late move to a downtrend. The fund is currently trading at $9.39, which is down 0.74% from the open. Today’s prediction sees support at $9.42 (± 0.04) and resistance at $9.62 (± 0.05). The predicted close for today is $9.55. Vector figures show +0.73% and holding positive for three more sessions until turning down. 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 0.42% at $1,313.20 a troy ounce. A pair of strong economic reports showing growth in private-sector jobs and GDP is pulling investment out of the perceived safe-haven metal. Tensions with North Korea and the aftermath of Hurricane Harvey had recently boosted the yellow metal, but market participants are now focusing on the timeline for a Fed rate hike.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall negative signals. The gold proxy is currently trading at $124.44, up 0.01%. Today’s predicted low is $123.46 (± 0.32) and the predicted high is $124.90 (± 0.32). The predicted close today is $123.74. 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 bond yields are seeing an uptick today following positive economic data and a cool-down in recent North Korean provocations. The yield on the 10-year Treasury note is currently up 0.49% at 2.14%. Bond prices tend to move inversely to yields.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see negative signals followed by a block of upward movements in our 10-day prediction window. Today’s vector of -0.18% oscillates in negative territory for three trading sessions before returning to positive movement.  The ETF is currently priced at $127.45- down 0.16% from the open. The predicted close today is $127.75 with a low and high of $127.10 (± 0.31) and $128.53 (± 0.32), 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 6.15% at 10.98, and our 10-day prediction window shows mixed signals. The predicted close today is 10.91 with a negative vector of -2.02%. Today’s predicted lows and highs are 10.91 (± 0.27) and 11.63 (± 0.29), 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.

Here’s where I put my money where my mouth is!

Click here for my daily recommendations & research tools!