U.S. Benchmarks Edge Lower, FOMC Minutes Released

by Vlad Karpel | 08/19/2020, 16:48

Fed officials kept interest rates near zero

All three major U.S. indices saw modest losses today following record highs reached by the Nasdaq and S&P on Tuesday. Mid-day trading saw U.S. stocks edge lower following the latest FOMC minutes release, in which Fed officials kept interest rates near zero while continuing their Treasury and securities purchases.

Earnings season is winding down

Last week, unemployment benefits were extended as Republicans and Democrats continue negotiating the latest stimulus package. Earnings season is winding down with the latest major releases coming from Target, TJX Companies, and L Brands, while several additional retailers are still due to release this week. Globally, Asian markets closed to mixed results while European markets edged higher.

Short-term traders could consider adding to positions when SPY nears $310

Based on our latest models, we are projecting the SPY to trade between $310-$340. We are still seeing a strong rotation into the value stocks (industrial, metals, energy, and banks) and away from growth stocks. As long as the market trades above the $323 level for the SPY, Market Commentary readers can consider adding to their positions using market pullbacks. Short-term traders could consider adding to positions when SPY nears $310 and we will look to be buyers into any short-term corrections. We will continue monitoring the VIX as the market can overshoot support and resistance levels when VIX is trading near $30 level, 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

FOMC Minutes – Wednesday
Leading Economic Indicators (July) – Thursday
Weekly Jobless Claims (8/15) – Thursday
Markit Manufacturing PMI (August) – Friday
Existing Home Sales (July) – Friday

Upcoming Earnings

TGT – Target – Wednesday
NVDA – Nvidia – Wednesday
LB – L Brands – Wednesday
TJX – TJX Companies – Wednesday
BABA – Alibaba – Thursday
ROST – Ross Stores – Thursday
DE – Deere – Friday
FL – Foot Locker – Friday

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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 positive outlook. Prediction data is 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 Salesforce.com (CRM). CRM is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (B) indicating it ranks in the top 25th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.

The stock is trading at $205.11 with a vector of +1.44% at the time of publication.

10-Day 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.

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 not have a position in the featured symbol, CRM. Our featured symbol is part of your free subscription service. It is 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 $42.60 per barrel, up 0.19% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $29.82 at the time of publication. 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.

Gold

The price for the Gold Continuous Contract (GC00) is down 1.13% at $1,927.00 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 $179.94, at the time of publication. Vector signals show -0.74% for today. 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.

Treasuries

The yield on the 10-year Treasury note is up, at 0.559% at the time of publication.

The yield on the 30-year Treasury note is up, at 1.234% 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.

Volatility

The CBOE Volatility Index (^VIX) is $22.28 at the time of publication, and our 10-day prediction window shows mixed signals. 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.