FOMC Keep Rates Unchanged, Bond-Buying Program
Markets in red after FOMC meeting press conference
U.S. benchmarks closed in the red following concerning remarks from Fed Chair Jerome Powell at his Federal Open Market Committee meeting press conference. The two-day meeting wrapped up today and saw the FOMC keep rates unchanged while confirming its intent to continue the bond-buying program. Powell’s “hawkish” comments caused some concern while the other key development was the mentioned potential of two interest rate hikes in 2023. Additional remarks included raising the overnight borrowing rate for banks to place cash temporarily in the central bank and stressing patience regarding the U.S. economic recovery, specifically in regards to the labor market.
May homeowner reports released
Besides the FOMC, May homeowner reports were released which showed an increase in housing starts but a decrease in housing permits. Oracle saw shares up following their Q4 release, with Smith & Wesson and Kroger due to release earnings reports on Friday. FedEx, Nike, and Carmax headline next week’s earnings releases while Q1 GDP and May Personal Income/Consumer Spending will also release. Globally, both Asian and European markets traded to mixed results today.
The $SPY broke below key mid-term support at $410; the top is set at $420 and we encourage users to consider selling into market rebounds. QQQ has been trading below the 50-day moving average for a few sessions and the market is getting close to an oversold level. Please watch the critical support levels on the SPY at $397 and $410. The market is trading in a well-defined range. We do expect a short-term correction to start in June. Furthermore, the $SPY has reached our target of $415-$425 based on the 6-month forecast from our Stock Forecast Toolbox and we encourage readers to raise cash at this point. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Key U.S. Economic Reports/Events This Week:
- Building Permits (May) – Wednesday
- Housing Starts (May) – Wednesday
- Import Pirce Index (May) – Wednesday
- Federal Open Market Committee Decision – Wednesday
- Fed Chair Jerome Powell Press Conference – Wednesday
- Weekly Jobless Claims (6/12) – Thursday
- Index of Leading Economic Indicators (May) – Thursday
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For reference, the S&P 10-Day Forecast is shown below:
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Prediction data uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.
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Thursday Morning Featured Symbol
Our featured symbol for Thursday is US Dollar Index Bullish Fund (UUP). CMG is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.
The stock is trading at $24.35 with a vector of +0.08% at the time of publication.
10-Day Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows the expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, UUP. Our featured symbol is part of your free subscription service. Not included in any paid Tradespoon subscription service. Vlad Karpel only trades his money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, or MonthlyTrader recommendations. If you are interested in receiving Vlad’s picks, please click here.
Oil
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $71.66 per barrel, down 0.62% at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals. The fund is trading at $48.98 at the time of publication. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Gold
The price for the Gold Continuous Contract (GC00) is down 2.53% at $1809.10 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $174.05 at the time of publication. Vector signals show -0.35% for today. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Treasuries
The yield on the 10-year Treasury note is up, at 1.580% at the time of publication.
The yield on the 30-year Treasury note is up, at 2.222% at the time of publication.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Volatility
The CBOE Volatility Index (^VIX) is $18.15 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
