Investors digest mixed earnings reports from several sectors and markets come to terms with valuations.

A new round of mixed earnings reports from major banks like Goldman Sachs and Citigroup, along with disappointing reports from the transportation and retail sectors, have resulted in flat movement for market indexes. Investors are growing skeptical over another rally, and many are looking toward upcoming earnings reports as a way to justify recent surges.

Goldman Sachs saw its stock gain 0.1% following reported profits performing better than expectations. Citigroup disappointed with its revenue report, and saw shares slide 0.5%. Financials have been one of the major driving forces behind index surges, particularly the DJIA. Any data which contradicts these financials boosts will likely result in a drag on the index as a whole.

Comments from President-elect Donald Trump about the US dollar being too strong caused a dip in the currency, but investors buying bargains helped regain some of those losses. Trump had singled out China in remarks made in an interview, once again calling out the weaker yuan against a strong dollar as being unfair for trade. Although most analysts still maintain a bullish outlook for the dollar, the temporary dip further illustrates the market-moving power of Trump’s often off-the-cuff remarks.

The DJIA is currently down 0.27% at 19773.44. The Nasdaq is dipping slightly, down 0.01% at 5538.36, and the S&P 500 is currently trading at 2267.62 which is also down 0.01% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our prediction model shows a selloff approaching with consistent downward vector values climbing towards 2%.  The predicted close today is 2259.58, with predicted support and resistance at 2251.40 (± 5.95) and 2267.89 (± 6.00), respectively.  

Upcoming Events and Reports

Inauguration Day comes this Friday. President-elect Donald Trump’s speech- and subsequent words and actions- will be highly scrutinized for any indication of concrete policy plans going into 2017. We have seen Trump cause stock selloffs in major defense contractors like Boeing, devaluations of the Mexican peso, and even dips in the US dollar as a result of spontaneous remarks. This unprecedented style of communicating with the public will take some getting used to, and the markets will need to learn how to react and adapt.

Oil

Oil prices are slipping as compounding concerns mount around production cuts and U.S shale production. Analysts are concerned that the OPEC cuts may not be enough to rebalance global oil supplies and adjust to ideal levels. An increase in shale oil production in the United States may also upset these cuts and cause further imbalance. Per-barrel prices took a dive this morning but continues to climb back. Currently, WTI for February delivery is at $51.58, down 1.71% from today’s open.

Looking at USO, a crude oil tracker, our 10-day prediction model reflects market sentiment. Consistent negative vector figures reach toward 2% at the end of the window. The fund is currently trading at 11.18, down 2.19%. Today’s prediction sees support at 11.35 (± 0.05) and resistance at 11.62 (± 0.05). The predicted close for today is 11.40.  

Gold

Gold is sliding a bit after making a leap past the $1210 mark in the past few days. Although we can expect the non-fiat metal to stay strong in uncertain times, the recuperating US dollar may be causing some sheds. Gold futures are currently down just $1.20, or 0.10% today at $1211.60 a troy ounce.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong consistent gains. The gold proxy is currently trading at 115.54. Today’s predicted low is 115.29 (± 0.26) and the predicted high is 115.98 (± 0.26). The predicted close today is 115.89. Positive vector figures climb toward ~4% at the end of the window, relative to current conditions.  

Treasuries

After 10-year yields dipped yesterday to 2.327%, they have since bounced back to 2.366%. As a result, we are seeing some sheds in bond prices.  Using the iShares 20+ Year Treasury Bond ETF (TLT) in our Stock Forecast Tool, we see this reflected in the 10-day prediction window.

TLT, an ETF which tracks 20+ year bond returns, is currently at 121.42. The predicted close today is 121.97 with a low and high of 121.51 (± 0.22) and 122.58 (± 0.22), respectively. Vector figures show consistent downward movement, but at a slow pace. Negative vector figures are contained under 1%, barely breaching 0.5%.  

Volatility

The CBOE Volatility Index (VIX) is slightly elevated today at 12.54, up 5.64%. Our 10-day model shows a sharp jump just before the end of this week with President-elect Donald Trump’s inauguration, followed by a downturn.  Expect to see big swings in the index within the next three days. The predicted close today is 12.34. We see a wide range of movement today, with predicted lows and highs at 11.87 (± 0.28) and 14.46 (± 0.33), respectively.

Other news

The transportation sector has been hurt by reports from major railroad operator CSX Corp. (CSX). Although sales outperformed expectations, earnings had disappointed against expectations. Shares are currently down 3.72%. Low commodity prices and a stronger U.S dollar had been cited as factors in the poor turnout.