Can strong earnings fend off economic and political pressures this week?

Major index performance is wavering today as investors are looking toward a massive round of earnings reports this week, as well as a highly anticipated FOMC meeting. We’ll also get a health-care announcement today from the White House, which can be used to gauge legislative gridlock for future Trump agenda items. Over 200 companies are reporting this week, including Alphabet (GOOG, GOOGL), Facebook (FB) and Amazon (AMZN). Expectations are high, so will earnings performance and a healthy Fed outlook outweigh political anxieties on Wall Street? There is currently a drive to gold, a perceived safe-haven asset, as investors weigh a staggering U.S dollar and uncertainty in Washington. Healthy corporate earnings may change that, however. Of the S&P 500 stocks which beat revenue estimates to date for Q2, the earnings growth rate is at 7.2%.

The DJIA is currently down 0.25%, or 53.32 points, at 21,517.05. The S&P 500 saw almost all components trading lower today, save for financials. The index is currently trading at 2,468.41- down 0.13% from the open. The Nasdaq-100 is up 0.04% at 6,391.23.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  incrementally building positive signals. Today’s positive vector figure of +0.27% moves to +0.94% within three trading sessions. Today’s predicted support and resistance is 2,472.54 (± 3.67) and 2,479.69 (± 3.68), respectively. The predicted close today is 2,479.12. 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 excellent candidates to look into. They are:

Target Corp. (TGT)

Target recently raised its Q2 guidance, and expectations are that earnings will beat previous guidance levels as well. The stock is relatively cheap right now and on an upward trajectory.

Our 10-day prediction model shows overall positive movement. The stock is currently trading at $54.21, which is down 1.15% from the open. Tomorrow’s prediction sees support at $54.80 and resistance at $56.08. The predicted close for tomorrow is $55.39. Vector figures show +1.21% for tomorrow, moving to +2.61% in three more 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.   

Applied Materials Inc. (AMAT)

Applied Materials is on a bullish trajectory preceding an upcoming earnings report, and has announced a well-received CFO transition. The chip equipment vendor is currently experiencing a healthy growth phase.

Our 10-day prediction model shows incrementally building positive signals. The stock is currently trading at $46.89, which is up 0.17% from the open. Tomorrow’s prediction sees support at $47.18 and resistance at $48.29. The predicted close for tomorrow is $47.28. Vector figures show +1.90% for tomorrow and move to +3.50% in three more 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

Investor attention has fixated on the ongoing OPEC meeting, as commentary trickles out gradually.  The top item of interest is a potential decision to include Nigeria and Libya- two OPEC members currently exempt from the production cut accord- into the fold. So far, oil prices are gaining after reports that energy officials at the meeting indicated the current deal could be extended into next year. Saudi Arabia’s energy minister also took a strong stance on OPEC members who have not met compliance standards. Notable is the turn inward from the previous talking points which tended to blame U.S domestic production on waning prices.  West Texas Intermediate for September delivery is currently priced at $46.30 per barrel, up 1.29% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows overall positive movement. The fund is currently trading at $9.48, which is up 1.50% from the open. Today’s prediction sees support at $9.26 (± 0.06) and resistance at $9.57 (± 0.06). The predicted close for today is $9.48. Vector figures show -0.36% for today but moves to +1.38% 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 August gold is currently up 0.12% at $1,256.40 a troy ounce. The fluctuating U.S dollar index, along with political uncertainties around the feasibility of passing tax reform and infrastructure spending bills have driven investment into the non-fiat metal. Barring a major political setback or a major shock to equities, gold prices should stay higher but not rise sharply.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows initial positive movement followed by negative signals. The gold proxy is currently trading at $119.34, down 0.01% from the open. Today’s predicted low is $118.55 (± 0.27) and the predicted high is $119.85 (± 0.27). The predicted close today is $118.70. 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 rose today ahead of this week’s FOMC meeting, which is expected to leave policy unchanged but update its perspective on the U.S economy. The timeline for future interest rate hikes may see some changes due to recent economic data which has underperformed against expectations. Notable news is the recent decision by the International Monetary Fund to reduce its growth forecast for the US this year from 2.3% to 2.1%. This is due to lower expectations of the Trump administration’s ability to pass growth-friendly policy items.  The yield on the 10-year Treasury note is currently up 0.63% at 2.24%. 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 +0.26% to +1.45% in three trading sessions.  The ETF is currently priced at $125.33- down 0.29% from the open. The predicted close today is $126.30 with a low and high of $125.69 (± 0.23) and $126.66 (± 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 3.10% at 9.65, and our 10-day prediction window shows strong negative signals. The predicted close today is 9.31 with a positive vector of +0.15%. Today’s predicted lows and highs are 9.09 (± 0.21) and 10.46 (± 0.24), 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.