Balancing Yellen, Draghi and Trump

A global central banking meeting is set to begin in Jackson Hole, Wyoming tomorrow- undoubtedly pulling investor attention toward any commentary or decision-making that may impact interest rates in the future.  This symposium is particularly important because market participants will be hearing from both Fed Chairwoman Janet Yellen and European Central Bank President Mario Draghi. Although no policy surprises are expected from either speakers, investors will be eager to see a plan from the ECB to taper off its asset-purchasing program next year. A secondary contributing factor to today’s trading activity may be President Trump’s campaign-style rally last night in Arizona. Trump warned of a government shutdown if his proposed border wall with Mexico did not receive funding. He also suggested the U.S. may altogether dissolve NAFTA, or the North American Free Trade Agreement. The comments are seen as red meat to his political base, and investors are primarily concerned with Friday’s speeches at the central banking symposium.

The DJIA is currently down 0.35%, or 76.50 points, at 21,823. The S&P 500 is currently trading at 2,444- down 0.36% from the open. The Nasdaq-100 is down 0.40% at 6,272.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  consistent downward movement. Today’s negative vector figure of -0.07% moves to -1.08% within three trading sessions. Today’s predicted support and resistance is 2,423.38 (± 3.50) and 2,452.51 (± 3.54), respectively. The predicted close today is 2,439.57. 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 Thursday

Based on our Stock Forecast Toolbox’s 10-day prediction data, we’ve found 2 great candidates of interest. They are:

Cisco Systems. (CSCO)

Investors are reacting to Cisco’s $320 million acquisition of Springpath, a ‘hyper-converged’ data infrastructure company. Springpath makes it easier for businesses to operate in a hybrid-cloud data environment, which will significantly boost Cisco’s footprint in that market.

Our 10-day prediction model shows a window of opportunity with positive signals for the next three trading sessions. The stock is currently trading at $31.18, down 0.27% from the open with a +1.16% vector figure for today. Tomorrow’s prediction shows an open price of $31.36, a low of $31.03 and a high of $31.60. The predicted close for tomorrow is $31.47. Vector figures show +1.02% for tomorrow, but reverse into negative signals within two more 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.   

Baxter International. (BAX)

Baxter, a global leader in nutrition therapy, is seeing strong positive signals in our Stock Forecast Toolbox. Baxter just announced a partnership with ASPEN (American Society for Parenteral and Enteral Nutrition) to address malnutrition by way of Parenteral Nutrition therapies.

Our 10-day prediction model shows incrementally building positive signals. The stock is currently trading at $61.40, which is down 1.20% from the open. Tomorrow’s prediction shows an open price of $61.55, a low of $61.25 and a high of $62.35. The predicted close for tomorrow is $62.32. Vector figures show +0.43% for tomorrow and increases above 1.20% within two more 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.   

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Oil

The anticipated data release from the Energy Information Administration today showed another decline in U.S crude supplies, which boosted per-barrel prices as investors welcome the eighth consecutive weekly decline. Continued climbs in U.S production, however, are working to limit boosts in prices.  West Texas Intermediate for October delivery is currently priced at $48.24 per barrel, up 0.94% 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 $9.86, which is up 0.92% from the open. Today’s prediction sees support at $9.66 (± 0.03) and resistance at $9.81 (± 0.03). The predicted close for today is $9.79. Vector figures show -0.14% for today, moving to -0.68% 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 up 0.22% at $1,293.50 a troy ounce. Rising uncertainty around the Trump agenda and the President’s late-Tuesday threat of a government shut-down is seeing a move to perceived safe-haven assets such as gold and government bonds. A pullback in the U.S dollar, reflecting lower trading in stocks today is also contributing to gains in the dollar-denominated metal. Although reports that the administration is making progress on tax-reform broke on Tuesday, Trump’s threats to both shut down the government and terminate the North American Free Trade Agreement worked against yesterday’s more optimistic sentiments. Investors are also acting cautiously ahead of the three-day global central banking symposium.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall positive signals. The gold proxy is currently trading at $122.57, up 0.29%. Today’s predicted low is $121.94 (± 0.27) and the predicted high is $123.26 (± 0.27). The predicted close today is $122.63. 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

President Trump’s Tuesday threat to shut down the government if his proposed border wall with Mexico does not receive funding has injected uncertainty into and directed some buying into treasury bonds today. Yields tend to move inversely to bond prices.   Another contributing factor to anxieties around Trump’s faltering pro-growth agenda is the recently publicized icy relationship between the President and Senate Majority Leader Mitch McConnell. This will be an impediment to tax-reform, raising the debt ceiling and other proposed agenda items which caused the post-election rally.  The yield on the 10-year Treasury note is currently down 1.54% at 2.19%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see overall mixed signals in our 10-day prediction window. Today’s vector of +0.30% sees a reversal to negative signals within three trading sessions, continuing to oscillate throughout the forecast.  The ETF is currently priced at $127.10- up 0.52% from the open. The predicted close today is $127.26 with a low and high of $126.44 (± 0.23) and $127.67 (± 0.23), 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 up 7.14% at 12.16, and our 10-day prediction window shows overall negative signals with a late uptrend. The predicted close today is 11.46 with a negative vector of -4.41%. Today’s predicted lows and highs are 9.34 (± 0.24) and 12.37 (± 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.

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

Click here for my daily recommendations & research tools!