Markets trading slightly lower in an atmosphere of political uncertainty, an energy rally remains uninhibited

Following the shocking firing of FBI Director James Comey by the Trump administration, many investors are taking a wait-and-see attitude to the political upheaval. Although it is too early to tell if this will be viewed as a Nixonian cover-up attempt, the firing has raised more questions about Trump’s ability to achieve political consensus around his pro-growth policies.

The Dow is currently down 0.08%, or 17.12 points, at 20,954.22. The Nasdaq-100 is down 0.01% at 6,116.47 and the S&P 500 is currently trading at 2,397.55 which is up 0.03% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows overall negative signals. Today’s negative vector figure of -0.10% moves to -0.34% in the next three sessions. Today’s support and resistance is 2,392.22 (± 4.41) and 2,403.57 (± 4.43), respectively. The predicted close today is 2,392.63.   

Oil

Crude markets are seeing a rally today, following the latest data from the U.S Energy Information Administration which showed the largest drop in U.S domestic supplies this year. The drop of 5.8 million barrels for the week ending May 5, coupled with a slowdown in U.S domestic production, is compounding to drive the rally. Most analysts expect OPEC and non-OPEC countries, like Russia, to agree on extending the global production cut accord which was initiated last November.  West Texas Intermediate for June delivery is currently priced at $47.46 per barrel, up 3.44% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows positive movement building incrementally. The fund is currently trading at $9.91, which is up 3.55% from the open. Today’s prediction sees support at $9.47 (± 0.05) and resistance at $9.85 (± 0.05). The predicted close for today is $9.56. Vector figures show +0.23% for today, climbing to +3.04% within three sessions. All vector figures are based on today’s market conditions.  

Gold

The price for June gold is currently up 0.36% at $1,220.90 a troy ounce. As with most surprise political events that introduce uncertainty, investors are turning to the perceived safe-haven asset. The firing of FBI Director James Comey by the Trump administration has the markets in a wait-and-see mode, while accusations of an attempted cover-up from Democrats begin to build. Outside of this story, we are seeing a high likelihood of a mid-June Fed interest rate hike and the U.S dollar is gaining strength. Because gold is priced in the U.S dollar, and does not offer a yield, both of these factors make the yellow metal less appealing to investors.

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 $116.115, up 0.06% from the open. Today’s predicted low is $114.63 (± 0.29) and the predicted high is $116.05 (± 0.30). The predicted close today is $114.91.  

Treasuries

Treasury yields are dropping today due to a mix of geopolitical uncertainty. Apart from the shocking firing of FBI Director Comey, North Korea recently announced it would go ahead with its sixth nuclear weapons test. The firing serves as a reminder of how unpredictable and volatile this White House can be. This event does not help to build investor faith in President Trump’s ability to pass business-friendly agendas with bipartisan approval.  The yield on the 10-year Treasury note had dropped 1.8 basis points to 2.380%, but has since recovered to its open level of  2.39%. 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 +0.01% today to -0.48% in three trading sessions.  The ETF is currently priced at $120.55- down 0.06% from the open. The predicted close today is $120.56 with a low and high of $119.95 (± 0.22) and $120.68 (± 0.22), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently down 0.80% from the open at 9.88. Relative to today’s conditions, the 10-day prediction window shows some positive movement followed by sharp negative correction. The predicted close today is 10.42 with a positive vector of +3.11%. Today’s predicted lows and highs are 9.56 (± 0.26) and 10.82 (± 0.29), respectively.