Investors digest economic data and look toward Fed policy statements, U.S government avoids shutdown

A voluminous round of economic data has presented less-than-expected results, which impacted Monday trading. Inflation figures are underperforming against investor expectations, and manufacturing data was also slightly weak. Investors are looking to economic data for verification on current market valuations, and to solidify the index gains following a post-election stock market rally. A Federal Reserve policy meeting is slated for Tuesday, so attention will be focused on any changes in tone or policy prescriptions. The U.S government has avoided a shutdown by agreeing to funding through September 30th, with an inclusion of an increase in military and border security spending.

European political anxieties are drawing down after former Italian Prime Minister Matteo Renzi won an important primary election. Renzi offers comfort to investors worried about political shifts to far-right nationalist parties in European countries, including France.

The Dow is currently down just 0.01%, or 1.73 points, at 20,958.15. The Nasdaq-100 is up 0.60% at 6,083.07 and the S&P 500 is currently trading at 2,390.75 which is up 0.29% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s positive vector figure of +0.07% rises to +0.16 in the next session before seeing negative corrections. Today’s support and resistance is 2,378.01 (± 4.88) and 2,406.54 (± 4.93), respectively. The predicted close today is 2,391.98.   

Oil

The persistent atmosphere of uncertainty around crude oil markets is continuing to drive prices down, as investors grow wary about the reality of an extension OPEC’s production cut deal. Domestic U.S production is continuing strong, with Baker Hughes showing a 15th straight weekly rise in rig counts. Investors are also looking into re-activated Libyan pipelines as another contributor to feeding the global supply glut.   West Texas Intermediate for June delivery is currently priced at $48.70 per barrel, down 1.26% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows strong positive movement. The fund is currently trading at $10.155, which is down 0.83% from the open. Today’s prediction sees support at $10.24 (± 0.05) and resistance at $10.58 (± 0.05). The predicted close for today is $10.35. Vector figures show +0.90% for today, then climb to +4.21% 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 $1,256.10 a troy ounce. Easing worries around European election cycles, particularly France and Italy, have drawn investors out of the perceived safe-haven asset.  This is following two consecutive sessions of gains for the yellow metal. Because gold is often used as a hedge against inflation, lower-than-expected reports on inflation rates had made an impact as well.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows consistent downward movement. The gold proxy is currently trading at $119.44, down 1.10% from the open. Today’s predicted low is $120.07 (± 0.30) and the predicted high is $120.77 (± 0.30). The predicted close today is $120.36.  

Treasuries

Treasury yields are rising following the recent round of economic reports, particularly PCE inflation data. The Personal-consumption Expenditures index (or PCE), is used by the Federal Reserve as an indicator of inflation. The yield on the 10-year Treasury note is up 2.29%, currently trading at  2.32%. Bond prices and yields are 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 overall negative movement in our 10-day prediction window. Relative to current conditions, we see vector figures moving from +0.08% today to -1.31% in four trading sessions.  The ETF is currently priced at $120.82- down 1.25% from the open. The predicted close today is $121.98 with a low and high of $121.42 (± 0.26) and $122.57 (± 0.26), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently down 3.60% from the open at 10.43. Relative to today’s conditions, the 10-day prediction window shows strong positive movement. The predicted close today is 11.51 with a positive vector of +5.87%. Today’s predicted lows and highs are 10.80 (± 0.25) and 12.04 (± 0.28), respectively.

Other news

The Federal Reserve will be making a policy announcement this Wednesday, following a meeting being held Tuesday. The April jobs report is due to be released this Friday.