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On Wednesday, the markets remained subdued as the earnings season continued. The U.S. stocks finished a quiet session mostly flat, as investors assessed another batch of corporate earnings, including Morgan Stanley and U.S. Bancorp. However, global government bond yields increased after the UK reported higher-than-expected inflation.
The Dow Jones Industrial Average fell while the S&P 500 remained unchanged; the Nasdaq Composite increased by less than 0.1%. One of the biggest earnings to monitor has been Netflix, which saw its stock fall by 3.2% after the streaming giant provided a disappointing outlook for its second quarter. On the other hand, Morgan Stanley’s financial results showed a decline in both earnings and revenue. Tesla, the electric-vehicle maker, announced its first-quarter earnings after the closing bell, which led to a drop in its shares in late trading after its report almost met expectations. In contrast, IBM had a mixed quarter.
Apart from the earnings season, investors are closely monitoring the future of monetary policy. The Federal Reserve’s latest Beige Book report on economic activity, released on Wednesday, revealed that overall economic activity was little changed in recent weeks, employment growth moderated slightly, and overall price levels rose moderately.
The $VIX is currently trading near the $17 level, and this week’s earnings reports, including $TSLA, $IBM, and $FCX, along with PMI data, can influence the market’s next move. We are closely monitoring the overhead resistance levels in the SPY, which are currently at $414 and $418, while the $SPY support is at $406 and $402. We expect the market to trade sideways for the next 2-8 weeks and suggest being market neutral at this time while encouraging subscribers to hedge their positions. Market commentary readers should maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows the expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, abt. Our featured symbol is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, or MonthlyTrader recommendations. If you are interested in receiving Vlad’s picks, please click here.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $78.96 per barrel, down 2.35%, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $70.84 at the time of publication. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The price for the Gold Continuous Contract (GC00) is down 0.61% at $2007.40 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $185.53 at the time of publication. Vector signals show -0.07% for today. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The yield on the 10-year Treasury note is up at 3.594% at the time of publication.
The yield on the 30-year Treasury note is down at 3.787% at the time of publication.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Prediction data is uploaded after the 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 $16.95 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
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