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The latest consumer price index, a key indicator of inflation, reported inflation that is higher than expected, which raises the possibility of bigger interest rate increases. Stocks in the United States continue to fall for the fourth day in a row as CPI figures reveal inflation at a 41-year high. This, in turn, caused all three major U.S. indices to trade lower and close in the red. Following the CPI numbers, traders of Fed funds futures referencing the Federal Reserve’s policy rate have raised their expectations for a full percentage-point increase at this month’s meeting, from 7.6% on Tuesday. Long-term treasuries declined, along with the dollar, while gold and bitcoin traded in the green. The volatility index, $VIX, trades near the $27 level, and focus now turns to the latest corporate earnings season which is set to kick off on Thursday with major banks and airlines.
The $JPM, $DAL, and $TSM earnings as well as CPI/PPI data this week can influence the next move in the market. Additional earnings to watch out for include Morgan Stanley and Ericsson on Thursday, while Friday features UnitedHealth Group, BlackRock, Citigroup, PNC Financial, U.S. Bancorp., and Wells Fargo. We are watching the overhead resistance levels in the SPY, which are presently at $396 and then $409. The $SPY support is at $380 and then $372. We expect the market to continue the short-term rally for the next couple of weeks. Globally, both European and Asian markets traded with mixed results. We encourage all market commentary readers to 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, PEP. 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 $96.39 per barrel, up 0.57%, 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 $74.78 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 up 0.52% at $1733.80 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 $164.75 at the time of publication. Vector signals show -0.36% 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 down, at 2.936% at the time of publication.
The yield on the 30-year Treasury note is down, at 3.121% 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 $26.17 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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