Regular trading closed for Martin Luther King Jr. holiday as investors review bank earnings and look toward the Trump inauguration

Trading will be considerably lower today for the holiday, as investors are keeping a keen eye on political news around the world. President-elect Donald Trump will be making his inauguration speech this Friday. The content and tone of his speaking engagements will be parsed and analyzed in order to gleam some insight into how his administration will operate in the first few months of the presidency.

Anxiety around Brexit is causing a move to safe-havens like the Japanese yen and gold. Last summer, the initial vote to remove the U.K from the E.U was met with an 18% drop for the pound against the dollar. British Prime Minister Theresa May will be outlining the government’s plan for the Brexit process this Tuesday.

Indexes slid on Friday, with the Dow closing down 0.4% from its open, while the S&P 500 dropped 0.1%. The Nasdaq-100 saw a weekly gain of 1%, ending Friday at 5,574.12. Financials drove the previous rally in December, and investors are seeing more positive earnings reports from major banks recently. Trump’s pro-business, pro-growth agenda would be advantageous to major banks and the next rally will be another one driven by banks. There is, however, some degree of speculation about the ease in which these new policies and programs may be implemented. There is quite a bit of assumptions being made at this point, and some investors are hesitant to commit to Trump euphoria.  

Using the ^GSPC symbol to analyze the S&P 500, our prediction model shows slight oscillations, relative to today’s conditions.  The predicted close today is 2269.30, with predicted support and resistance at 2253.86 (± 3.63) and 2280.59 (± 3.68), respectively.  

Upcoming Events and Reports

Inauguration Day is this Friday, and investors are watching for signals toward Trump’s fiscal policies and business-friendly growth plans. Expect disruptions, protests and competing events on the 20th. While Trump has had a short-term positive impact on the markets, there will be wide ranging political turmoil which will certainly determine the course of the transition.  

British Prime Minister Theresa May will be explaining the plan for the Brexit process in a speech on Tuesday. Investors are apprehensive about the plan and the pound has sold off leading up to this speech.

More reports are due later this week, particularly for financials. Morgan Stanley, Goldman Sachs, and Citigroup will all be reporting and this will give more context to a perceived potential rally in the near future.

Oil

Crude oil futures are working down toward the $50 mark again as speculation holds around production-cut commitments and cheating. The initial announcement and rounds of released statements from OPEC and non-OPEC countries sparked a rally which has yet to breach the $55 mark. Currently, the per-barrel price for February delivery is at $52.27, down 0.19% from today’s open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows a potential selloff in the near future, relative to today’s conditions. Consistent negative vector figures hover around 1% in the next few days, and then climb to around 3% at the end of the window. The fund is currently trading at 11.41, down 1.13%. Today’s prediction sees support at 11.16 (± 0.05) and resistance at 11.42 (± 0.05). The predicted close for today is 11.29.  

Gold

Gold is proving attractive this week to anxious investors looking for a safe-haven. The non-fiat metal is shoring up prior to tomorrow’s speech from British Prime Minister Theresa May regarding Brexit, as well as President-elect Donald Trump’s inauguration on Friday. Gold futures are currently up $6.30, or 0.53% today at $1202.50 a troy ounce. The yellow metal neared the $1210 mark earlier today, reaching its highest point in eight weeks.

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 114.21. Today’s predicted low is 113.59 (± 0.25) and the predicted high is 114.95 (± 0.25). The predicted close today is 114.72. Positive vector figures climb from ~1% to ~4% at the end of the window, relative to current conditions.  

Treasuries

Speculation is rising around the reality of a Trump administration’s fiscal policies and pro-growth agenda. The President-elect has so far come up short with concrete fiscal policies and other details around the means to achieving economic growth. Yields are still slipping, and traders have responded to short bets in the bond market by purchasing bonds and driving up the price.  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 121.31. The predicted close today is 121.57 with a low and high of 121.31 (± 0.22) and 122.37 (± 0.22), respectively. Consistent positive vector figures are contained under 1.5%, incrementally moving upward from 0.32% today and passing 1% in the next six days.  

Volatility

The CBOE Volatility Index (VIX) is currently at 11.23, down 2.69%. We can expect jumps both prior to and after the inauguration event this Friday. There will be compounding levels of uncertainty across different segments of the markets as we prepare for the reality of a Trump administration, as well as the tentative plan for Brexit. Our 10-day model shows consistent positive movements, getting heavier around Jan. 18 – Jan. 20. The predicted close today is 12.08. Today’s predicted lows and highs are 11.09 (± 0.27) and 12.46 (± 0.30), respectively.

Other news

Netflix Inc. (NFLX) is scheduled to report this Wednesday with outstanding results. The media-streaming service will be describing its ambitious and innovative plans to grow into a global market. Netflix has enjoyed success in Brazil, which is becoming one of its biggest market. The Brazil/Netflix story will be looked at as a template for the company to simultaneously create localized content in different countries and undertaking large-scale, global blockbuster level titles.

German auto maker Daimler AG (DAI.XE) saw its shares fall 1.7% following comments made by Donald Trump in an interview with German newspaper Bild. President-elect Trump derided Germany as “unfair” in its trade with the US within the automotive sector. Trump also characterized these arrangements as “a one-way street”.