How much strength can great earnings lend to the markets this week?

Markets today are smooth sailing after a round of strong earnings reports and common expectations that the conclusion of an FOMC meeting will result in little-to-no change in policy thinking.  While the political wranglings of a difficult health-care bill situation continues, little has changed so it’s not top-of-mind for investors today.  Notable earnings reports include Boeing (BA), which boosted the Dow with an 8% gain, and AT&T (T). The telecom giant’s better-than-expected earnings saw its share price rise 4% and drove the Telecom sector of the S&P 500. Overall, earnings are looking good with very few laggards which is driving investors sentiments while we await news from the Fed. Keep an eye on financials, materials and technology sectors as they are seeing another uptrend.

A quick update news around the Tradespoon office: my nephew, who’s currently studying finance, is now interning with us for the summer! It’s truly fascinating to see him dive into our technology and I’m excited to see how’s he’s grown into a very bright man and what kind of fresh perspectives he can bring. Now let’s dig into the markets with a fresh eye:

The DJIA is currently up 0.38%, or 82.16 points, at 21,696. The S&P 500 is currently trading at 2,478- up 0.04% from the open. The Nasdaq-100 is up 0.15% at 6,422.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  overall positive signals. Today’s positive vector figure of -0.02% moves to +0.28% within three trading sessions. Today’s predicted support and resistance is 2,474.82 (± 3.51) and 2,484.45 (± 3.53), respectively. The predicted close today is 2,477.72. 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 excellent candidates of interest. They are:

E*TRADE Financial Corp. (ETFC)

After beating expectations with its recent earnings report, E*TRADE is continuing a healthy uptrend.

Our 10-day prediction model shows strong positive movement. The stock is currently trading at $41.75. Shares are currently down 0.41% from the open, but we see a +0.72% vector for today’s session. Tomorrow’s prediction sees support at $41.94 and resistance at $43.07. The predicted close for tomorrow is $42.85. Vector figures show +1.38% for tomorrow, moving to +3.05% 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.   

Monster Beverage Company. (MNST)

Monster is looking at an uptrend, and will be supported by a better-than-expected earnings report from Coca-Cola- which has a 16.7% stake in Monster. The deal between the two involves a swap of energy drink brands: Coca-Cola’s energy drink brands transferred to Monster, and Monster’s non-energy drink brands transferred to Coca-Cola. Monster has been performing well on its own, but good news from Coca-Cola means good news for Monster.  

Our 10-day prediction model shows building positive signals. The stock is currently trading at $53.78, which is up 0.73% from the open. Tomorrow’s prediction sees support at $53.35 and resistance at $54.29. The predicted close for tomorrow is $53.59. Vector figures show +1.32% for tomorrow and project above +2% further into the forecast. 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 crude oil market is seeing higher prices today, following a drop in U.S supplies for the fourth week in a row. In another development, export cuts have been signaled by the UAE, Russia and now Nigeria. Nigeria, along with Libya, have been so far excluded from OPEC’s production cut agreement.  West Texas Intermediate for September delivery is currently priced at $48.69 per barrel, up 1.50% from the open.  These prices are nearing a two-month high.

Looking at USO, a crude oil tracker, our 10-day prediction model shows initial positive signals followed by a negative correction. The fund is currently trading at $9.97, which is up 1.63% from the open. Today’s prediction sees support at $9.71 (± 0.06) and resistance at $9.92 (± 0.06). The predicted close for today is $9.73. Vector figures show +0.50% for today, moving to -1.53% 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 0.32% at $1,248.40 a troy ounce. The price decline is due to expectations that the conclusion of the FOMC meeting today will see policy staying relatively the same as previous commentary has suggested. Although Fed thinking is not significantly hawkish, common thought does not see things turning more dovish- which is boosting the U.S dollar index. Gold prices tend to move inversely to the strength of the U.S dollar, and investors tend to exit gold investments in favor of bullish market sentiments.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall negative signals. The gold proxy is currently trading at $118.68, down 0.20% from the open. Today’s predicted low is $118.54 (± 0.28) and the predicted high is $119.55 (± 0.28). The predicted close today is $118.54. 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 are seeing drops today as investors revert to wait-and-see mode ahead of today’s FOMC conclusion at 2 p.m. Eastern. The major focus today is the Fed’s perspective on how to remedy its balance sheet, including a $4.5 trillion collection of government bonds and securities.  The yield on the 10-year Treasury note is currently down 0.35% at 2.33%. 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 slight but consistent positive signals in our 10-day prediction window. Today’s vector moves from +0.18% to +0.36% in three trading sessions.  The ETF is currently priced at $123.14- down 0.35% from the open. The predicted close today is $124.36 with a low and high of $123.57 (± 0.29) and $124.78 (± 0.29), 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 down 0.21% at 9.41, and our 10-day prediction window shows one half positive signals followed by negative movement. The predicted close today is 9.36 with a positive vector of +0.60%. Today’s predicted lows and highs are 8.97 (± 0.20) and 9.61 (± 0.21), 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.