U.S. Benchmarks Edge Higher Following Relief Bill Signing, FOMC Decision Due Wednesday
Rescue Plan will provide an additional round of stimulus checks
After a back and forth week, U.S. stocks ended the week higher as the latest economic relief package was signed into law by President Biden. The American Rescue Plan will provide an additional round of stimulus checks, extend unemployment benefits, rework several tax codes, and provide over $160 billion towards vaccine development and distribution, as well as an additional $20 billion towards community vaccination sites.
While the market will likely continue to see the impact of the bill in weeks to come, focus now turns to this week’s Federal Open Market Committee FOMC and the latest decision from the central bank. The two-day meeting will conclude on Wednesday with Fed Chair Jerome Powell holding a press conference while additional key economic reports due to release this week include February Retail Sales, Industrial Production, Building Starts and Permits, and the weekly unemployment report. The recent rise in treasury yields, something Powell will likely address in his comments Wednesday, has seemed to slow with the 10-year note trending down today, at 1.610%. Globally, European markets finished unanimously lower while Asian markets closed to mixed results.
Momentum behind the bulls is deteriorating and we expect a short term correction this week or the next, back to the 50-day moving average. Until an additional breakout is maintained, our models are projecting the SPY to trade in the range of $375-$397. The next level of support is set at the 50-day moving average of $375-$380 and 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
- Retail Sales (February) – Tuesday
- Import Price Index (February) – Tuesday
- Industrial Production (February) – Tuesday
- FOMC Decision/Fed Chair Powell Announcement – Wednesday
- Building Permits (February) – Wednesday
- Housing Starts (February) – Wednesday
- Weekly Jobless Claims (3/13) – Thursday
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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Tuesday Morning Featured Symbol
Our featured symbol for Tuesday is Delta Air Lines (Dal). DAL is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.
The stock is trading at $51.12 with a vector of +3.89% 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, DAL. 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.
West Texas Intermediate for Crude Oil delivery (CL.1) priced at $65.33 per barrel, down 0.43% 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 $43.67 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.
The price for the Gold Continuous Contract (GC00) is up 0.50% at $1728.60 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $161.66 at the time of publication. Vector signals show -0.51% 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.
The yield on the 10-year Treasury note is down, at 1.611% at the time of publication.
The yield on the 30-year Treasury note is down, at 2.366% 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 is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The CBOE Volatility Index (^VIX) is $22.67 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