A boost in crude oil prices drive climbs in major U.S indexes, although recent economic data was weaker-than-expected

A joint statement released by energy officials from Russia and Saudi Arabia proposes a nine-month extension for the OPEC-led global production cut accord. This proposal is three months longer than most had expected, and the announcement has strengthened per-barrel crude prices. A massive ransomware cyberattack known as the “WannaCry” virus is expected to continue causing significant problems worldwide- and as a result- cybersecurity stocks are advancing. Energy companies were also counted as among the biggest movers today.

Geopolitical worries return to the global stage following a North Korean ballistic missile test, which is being viewed as aggressive posturing to South Korea’s newly elected president- Moon Jae-in. A North Korean foreign minister had recently indicated that the reclusive regime is willing to have talks with the U.S. under certain conditions.  

The DJIA is currently up 0.38%, or 79.72 points, at 20,985.44. The Nasdaq-100 is up 0.42% at 6,152.45 and the S&P 500 is currently trading at 2,403.55 which is up 0.49% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows consistent negative signals. Today’s negative vector figure of -0.01% moves to -0.22% in the next three sessions. Today’s support and resistance is 2,387.88 (± 4.23) and 2,393.82 (± 4.24), respectively. The predicted close today is 2,389.51.   

Oil

Crude oil prices are climbing today following a joint announcement from Saudi Arabia and Russia which endorses a nine-month extension of the OPEC global production cut deal struck in November. This extension will need to be confirmed during a May 25 OPEC meeting in Vienna, but most analysts expect a confirmation. Although the news is positive for per-barrel prices, the consistent rise in U.S domestic production will continue to hamper those efforts. When the global crude oil market firms up, U.S producers enter the market to take advantage of high prices. Their production activity often has an inverse effect on per-barrel prices. West Texas Intermediate for June delivery is currently priced at $49.12 per barrel, up 2.74% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows negative movement building incrementally. The fund is currently trading at $10.23, which is up 2.77% from the open. Today’s prediction sees support at $9.76 (± 0.05) and resistance at $9.95 (± 0.05). The predicted close for today is $9.91. Vector figures show -0.46% for today, moving to -1.01% within three sessions. All vector figures are based on today’s market conditions.  

Gold

The price for June gold is currently up 0.48% at $1,233.70 a troy ounce. The rise prices for the yellow metal can be attributed to a few factors. In a display of military might, meant to challenge newly-elected South Korean president Moon Jae-in, North Korea conducted another ballistic missile test over the weekend. When geopolitical tension is high, investors will retreat to perceived safe-haven assets such as gold. The non-fiat metal was also boosted by a weak U.S regional manufacturing report- which raises concerns about economic stability for investors. Additionally, a weakened U.S dollar- the currency in which gold is priced in-  has made the precious metal more attractive to investors holding foreign currencies.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall downward movement. The gold proxy is currently trading at $117.22, up 0.33% from the open. Today’s predicted low is $116.83 (± 0.28) and the predicted high is $117.38 (± 0.28). The predicted close today is $117.22.  

Treasuries

Treasury yields are climbing today due to analyst expectations of stronger economic data coming in May. The rise in yields seem to ignore a recent regional manufacturing gauge- The Empire State Manufacturing Index- which showed its first drop since October of last year. April’s consumer-price index data was weaker than expected this past Friday, but most analysts maintain that these gauges are historically weak in the beginning of the year before firming up. The yield on the 10-year Treasury note is currently up 0.45% at 2.34%. Bond prices and yields are 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 four sessions of mixed signals followed by consistent downward movement in our 10-day prediction window. Relative to current conditions, we see vector figures moving from +0.16% today to -0.33% in three trading sessions.  The ETF is currently priced at $121.09- down 0.25% from the open. The predicted close today is $121.79 with a low and high of $120.41 (± 0.27) and $122.04 (± 0.27), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently down 0.67% from the open at 10.47. Relative to today’s conditions, the 10-day prediction window shows mixed activity. The predicted close today is 9.74 with a negative vector of -6.20%. Today’s predicted lows and highs are 8.82 (± 0.25) and 10.69 (± 0.31), respectively.

Other News

Chinese President Xi Jinping has announced more than $100 billion in financing for the “One Belt, One Road” massive infrastructure plan. Also dubbed the “New Silk Road”, the project will aim to link trading hubs in China, Europe and Africa together to facilitate a new era of globalization.