Financial sector leads advances in U.S stock market amidst underwhelming corporate earnings reports

Stock indexes are gaining today as investors digest a round of corporate earnings reports and look for guidance. A majority of sectors in the S&P 500 are seeing gains, led by financials in particular. Morgan Stanley (MS) saw gains of 3.3% today, following a strong earnings report. While financials carried the day, investors are looking to other sectors for stronger reports in order to validate bullish market valuations. IBM Corp. (IBM), which is a component of the DJIA, produced a weaker-than-expected quarterly sales on Tuesday. IBM shares are currently down 5.46%, reaching its lowest level since December.     

The Dow is currently up 0.13%, or 25 points, at 20,497. The Nasdaq-100 is up 0.63% at 5,886 and the S&P 500 is currently trading at 2,348 which is up 0.27% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows overall slight downward movement. Today’s negative vector figure of -0.08%  progressed to -0.24% in three sessions before easing. Today’s support and resistance is 2,329.45 (± 4.76) and 2,348.96 (± 4.80), respectively. The predicted close today is 2,339.48.   

Oil

Crude oil markets are sliding today, following data released today from the U.S Energy Information Administration. The report showed domestic crude inventories shrinking by 1 million barrels, but also indicated an unexpected rise in gasoline supplies.  West Texas Intermediate for May delivery is currently priced at $52.25 per barrel, down 0.46% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows downward movement building incrementally. The fund is currently trading at $10.82, which is down 1.99% from the open. Today’s prediction sees support at $10.82 (± 0.06) and resistance at $11.13 (± 0.06). The predicted close for today is $11.02. Vector figures show -0.15% for today, then progress past -1.51% within three sessions. All vector figures are based on today’s market conditions.  

Gold

The price for June gold is currently down 0.90% at $1,282.20 a troy ounce. A stronger dollar is chipping away at previous gains, but heightened geopolitical tension and European political anxieties are providing a floor for the precious metal.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows consistent positive movement. The gold proxy is currently trading at $121.77, down 0.85% from the open. Today’s predicted low is $122.37 (± 0.32) and the predicted high is $123.94 (± 0.32). The predicted close today is $123.17. Relative to today’s conditions, vector figures oscillate but largely remain under +1.00%.  

Treasuries

Although geopolitical tensions continue to occupy investor thought, we are seeing treasury yields rebounding from recent lows.  Although a volatile North Korea, tense U.S-Russia relations, and political uncertainty in the U.K and Europe are top of mind, the bond market is starting to stabilize. Many are seeing this yield rebound as reaction to climbing bond prices, rather than a direct reflection of investor sentiment. Bond prices and yields are inversely related to one another. The yield on the 10-year Treasury note is up 2.16%, currently trading at  2.22%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see positive movement building incrementally in our 10-day prediction window. Relative to current conditions, we see vector figures moving from +0.38% today to +1.23% in three trading sessions.  The ETF is currently priced at $123.91- down 0.63% from the open. The predicted close today is $124.98 with a low and high of $124.02 (± 0.20) and $125.26 (± 0.20), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently down 5.83% from the open at 13.58. Relative to today’s conditions, the 10-day prediction window shows strong and consistent negative signals. The predicted close today is 14.31 with a negative vector of -2.69%. Today’s predicted lows and highs are 13.16 (± 0.18) and 15.25 (± 0.21), respectively.

Other News

The Federal Reserve is scheduled to release their Beige Book report on current economic conditions today. The report is to be released at 2 p.m Eastern Time. Investors will be looking to this report for details of Fed thinking regarding a decision to go ahead with two or more rate hikes this year.