Stocks continue gains following a Trump tax plan announcement, strong January retail data and hints of a March rate hike from the Fed

Major indexes are poised to continue a positive streak today, following an announcement from President Donald Trump that a “massive” tax plan is forthcoming in the “not-too-distant future.” Investors and analysts had become somewhat apprehensive  of market valuations when details around fiscal policy had been lacking. Some though valuations may be overstretched, and had concerns around the administration rolling out its economic agenda amidsts recent political turmoil. Those anxieties appear to be reversing as of late.   

Federal Reserve Chairwoman Janet Yellen testified to the House Financial Services Committee on Tuesday. In her remarks, Yellen alluded to a potential interest rate hike by the next Fed meeting in March. The raise would be gradual. These comments, coupled with optimistic market sentiments due to President Trump’s plans for deregulation and tax cuts, are driving indexes consistently higher. Economic data seems to be corroborating bullish market spirits as well. Retail sales climbed 0.4% in January, which has beat expectations. The Consumer Price Index also saw a 0.6% rise last month- the largest increase in four years.

The Dow Jones Industrial Average is currently up 0.46%, or 93.62 points, at 20,598.03. The Nasdaq-100 is on track to secure a seven-day streak of consistent gains, currently up 0.27% at 5799.95.  The S&P 500 up 0.15 from the open at 2343.46.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows slight losses followed by consistent gains relative to today’s conditions.  The predicted close today is 2310.03, with predicted support and resistance at 2300.06 (± 3.07) and 2316.10 (± 3.09), respectively.  

Oil

March West Texas Intermediate Crude is down 0.24% currently, trading at $53.16 per-barrel. Once again, investors are seeing data from the American Petroleum Institute which shows 9.9 million barrel increase for the week ending on February 10. This figure was well over the forecasted rise of 3.25 million barrels. Although OPEC is showing compliance in global production cuts, U.S output continues to offset that with increased supplies and oil rig activity.

Looking at USO, a crude oil tracker, our 10-day prediction model shows signals of continued sheds in prices. The fund is currently trading at 11.36, down 0.20% from its open. Today’s prediction sees support at 11.35 (± 0.04) and resistance at 11.50 (± 0.04). The predicted close for today is 11.43. Negative vectors remain under 0.50% with slight corrections, relative to today’s conditions.  

Gold

After four sessions of consistent sheds, gold prices are inching higher today. Prices are currently up 0.60% at $1,229.20 a troy ounce. These gains may become vulnerable to aforementioned bullish market sentiments due to speculation around future inflation and Fed rate hikes. Increased rate hikes and a further strengthening U.S dollar would spike the cost of the non-fiat metal, making it less attractive to investors.   

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows an incremental increase of losses relative to today’s conditions. These negative vector values rise from under 0.50% to breach 1% at the end of the 10 day window.  The gold proxy is currently trading at 117.29, up 0.31%. Although the proxy is reflecting today’s gains, the predicted vector movement for this trading session is -0.31%. Today’s predicted low is 116.07 (± 0.30) and the predicted high is 117.25 (± 0.30). The predicted close today is 116.69.  

Treasuries

Reflecting the recent consumer data and Janet Yellen’s comments this week, treasury yields are rising strong today while bond prices shed. Although a rate increase in March is still not a sure bet, many believe comments today are meant to position the Fed optionality when the meeting does occur. Currently, the 10-year Treasury note’s yield is up 1.86% from its open at 2.51%. Trump’s comments on a ‘massive’ tax plan has also added to market sentiments driving this action, but many are still apprehensive about conditions within the next few months for the administration.

Using the iShares 20+ Year Treasury Bond ETF (TLT) in our Stock Forecast Tool, we see slight positive corrections for today followed by stronger positive signals in a 10-day prediction window. Relative to today’s conditions, we see vector figures building from under 0.50% toward 2% within the next 10 days. The ETF is currently priced at $118.98, which is down 0.44% from the open. The predicted close today is 119.65 with a low and high of 118.98 (± 0.30) and 121.01 (± 0.31), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently up 9.50% at 11.76 from the open today.  Relative to today’s conditions, the 10-day prediction window shows choppy movement with high magnitudes of change. The predicted close today is 11.06. Today’s predicted lows and highs are 10.70 (± 0.22) and 11.84 (± 0.25), respectively.

Other news

Susquehanna Financial has just downgraded Under Armour Inc (UAA) due to comments made by its CEO about President Donald Trump. The positive remarks about Trump were cited as a ‘reputational risk’ in a ‘polarized’ political climate. Several celebrity athletes sponsored by Under Armour released critical statements regarding the CEO’s praise for the new U.S president. Stock prices for the company have barely changed, however.

Asset manager Fortress Investment Group LLC (FIG) is seeing a 29% jump in share prices after Japan’s SoftBank Group Corp. agreed to acquire it for $3.3 billion.