Oil surges as OPEC finalizes discussions, major indexes hit new records

There is a consensus that today’s OPEC meeting will result in an agreement around production caps. The barrels-per-day production numbers are to be reduced to 32.5 million from 33.6 million. One crucial part of this deal involves the estimation of production numbers for each country. There is concern about how these figures are calculated and who is running that process. There is a call, lead by Iraq, for each country to use independent bodies to calculate production numbers. If OPEC members do reach an agreement today, the organization will proceed to connect with non-OPEC members and coordinate a global reduction. Crude oil futures have spiked 8% today, helping to push the DJIA and S&P 500 to new heights.

The Dow has sprung 68.23 points, or 0.36%, and is currently trading at 19188.85. The S&P 500 is up 0.13% at 2207.52. These levels may be a temporary norm amidst the energy rally and wide anticipation of Trump’s corporate tax cuts, financial deregulation, and loosened environmental restrictions. The Nasdaq-100 is under pressure due to its collection biotech stocks. The drop of 0.4% brings the index to 5358.45 at the moment.  

Trump makes cabinet appointments amidst internal transition dramatics.

President-elect Donald Trump has made a round of new cabinet appointments- notably the Treasury Secretary and the Secretary of Commerce. Mr. Trump has tapped Steven Mnuchin, a wealthy Hollywood producer with a strong Goldman pedigree, as Treasury Secretary. Mnuchin largely donated to Democrats in the past, but has close ties to Trump and served as campaign finance chairman in his campaign for the office. This pick can be seen as an offering of stability, as Mnuchin follows a tradition of ex-Goldman appointments such as Henry Paulson and Robert Rubin.

Wilbur Ross Jr., a storied figure in business who most notably saved a swath of US steelmakers from bankruptcy, has been named Commerce Secretary. A strong ally of Trump, he once saved the infamous Taj Mahal casino in Atlantic City from being seized by creditors and kept Trump in charge. Ross is revered by many for his acumen in restructuring and restoring bankrupt businesses.

Other selections on Tuesday included Elaine Chao as Transportation Secretary and Rep. Tom Price, a Republican from Georgia, as Health and Human Services Secretary.

Oil

Global production cuts are looming following today’s OPEC meeting- driving a sharp rally in the energy sector.  Crude oil is up 8.51%, making its expected climb to $50 and currently trading at $49.08.

Looking at USO, a crude oil tracker, our 10-day prediction model shows a mixed outlook due to the breaking news. The fund is mirroring oil futures figures, up 8.75% and currently trading at 10.94. Today’s prediction sees support at 10.02 (± 0.07) and resistance at 10.20 (± 0.07). The predicted resistance and support points to 10.25 and 9.86, respectively, at the end of the window. 

Gold

Gold is selling off, likely due to the oil surge. Investors are withdrawing from their respite amidst solidifying consensus around pending OPEC production caps. The yellow metal dipped 1.28% to $1175.50 today. Emerging economic data is looking good, particularly hiring trends amongst private employers. ADP, a payroll processor, has released today a report showing 216,000 new jobs in November. This figure beat expectations, and precedes a Friday report release from the U.S government on nonfarm payrolls.  

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, we see mixed vectors staying within 1-2% changes. It is currently trading at 111.9099 which is down 0.78, or 1.2%. Today’s predicted low is 111.52 (± 0.44) and the predicted high is 113.62 (± 0.45) .

Volatility

The CBOE Volatility Index (VIX) is up 1.71% at 13.12 with strong consistent gains predicted. Our 10-day model shows positive vectors rising from ~2% to ~15%. The predicted close today is 13.27. Today’s predicted lows and highs are 12.88 (± 0.27) and 14.20 (± 0.30), respectively.  Predicted 10-day figures show resistance contained between ~14 and ~15. Predicted support stays between ~12 and ~14.

Oil

Global production cuts are looming following today’s OPEC meeting- driving a sharp rally in the energy sector.  Crude oil is up 8.51%, making its expected climb to $50 and currently trading at $49.08.

Looking at USO, a crude oil tracker, our 10-day prediction model shows a mixed outlook due to the breaking news. The fund is mirroring oil futures figures, up 8.75% and currently trading at 10.94. Today’s prediction sees support at 10.02 (± 0.07) and resistance at 10.20 (± 0.07). The predicted resistance and support points to 10.25 and 9.86, respectively, at the end of the window. 

In other news

Donald Trump has declared on Twitter, his favorite mode of public discourse, that he will be removing himself from his business ventures as inauguration day nears.

“Legal documents are being crafted which take me completely out of business operations. The Presidency is a far more important task!”  Trump tweeted on Tuesday.