U.S stock market sees choppy, minimal movements preceding conclusion of Fed policy meeting

U.S indexes are fluctuating between gains and losses today as investors anticipate a Fed rate hike announcement while digesting disappointing economic data. Inflation and retail sales for the month of May was not as expected, so there is movement into safe-haven assets. The U.S dollar also lost some strength due to those reports.  Federal Reserve Chairwoman Janet Yellen is due to speak 2:30 p.m. Eastern today, shortly after the official policy statement is released.

The DJIA is currently down 0.04%, or 8.65 points, at 21,340. The Nasdaq-100 is up 0.71% at 6,228 and the S&P 500 is currently trading at 2,438 which is down 0.10% 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 -0.07% moves to -0.18% in the next four sessions. Today’s support and resistance is 2,419.86 (± 3.56) and 2,445.34 (± 3.59), respectively. The predicted close today is 2,435.06.   

Oil

Less-than-expected weekly declines in U.S domestic inventories and an increase in production is driving crude oil prices down sharply today. This data follows a recent report from the International Energy Agency which states the global oil glut will continue this year regardless of OPEC’s production cut deal.  West Texas Intermediate for July delivery is currently priced at $44.77 per barrel, down 3.64% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows incrementally building downward movement. The fund is currently trading at $9.24, which is down 3.75% from the open. Today’s prediction sees support at $9.22 (± 0.06) and resistance at $9.60 (± 0.07). The predicted close for today is $9.49. Vector figures show -0.60% for today, which continue downward to -1.38% within four trading sessions.  All vector figures are based on today’s market conditions.  

Gold

The price for August gold is currently down 0.80% at $1,278.50 a troy ounce. Just ahead of a likely Fed rate hike decision, underperforming economic data has spurred a slight rotation into perceived safe-haven assets. Inflation and retail sales data for the month of May did not meet expectations, and the U.S dollar has weakened. Gold becomes more attractive to investors holding foreign currencies when U.S dollar is weakened, as it is priced in that currency.  

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall downward movement. The gold proxy is currently trading at $121.34, up 0.72% from the open. Today’s predicted low is $119.58 (± 0.25) and the predicted high is $121.12 (± 0.25). The predicted close today is $120.86.

Treasuries

Treasury yields dipped sharply today after a release of disappointing inflation figures. Although a Fed interest rate hike is expected today, the weak inflation numbers will dampen investor sentiment around fast-paced future rate hikes.  The yield on the 10-year Treasury note is currently down 4.49% at 2.12%. Bond prices and yields are typically 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 an incrementally building downward trend in our 10-day prediction window. Relative to current conditions, we see vector figures moving from -0.07% today to -0.47% in three trading sessions.  The ETF is currently priced at $126.45- up 1.66% from the open. The predicted close today is $124.31 with a low and high of $123.24 (± 0.19) and $124.63 (± 0.20), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently up 4.41% at 10.88, and our 10-day prediction window shows initial downward signals followed by positive corrections. The predicted close today is 10.07 with a negative vector of -0.10%. Today’s predicted lows and highs are 9.63 (± 0.37) and 11.32 (± 0.43), respectively.