Morning Brief
Headline News:
Equity futures point to a higher opening this morning after the major averages finished mostly lower to start the holiday-abbreviated week. Yesterday’s session was a bit of a whirlwind as the market navigated more mixed signals surrounding the conflict in Iran. Strength was relatively broad, but renewed weakness across semiconductor names weighed heavily on the major averages.
This morning’s early gains are largely being attributed to developments on the geopolitical front. In particular, The Wall Street Journal reported that President Trump has told aides he is willing to end U.S. military operations against Iran even as the Strait of Hormuz remains closed, as trying to secure the waterway would likely push the operation past its 4-to-6 week timeline.
Still, the current state of negotiations remains unclear, with The New York Times reporting that Iran’s fractured leadership is making it difficult for the country to coordinate. The Pentagon will hold a briefing on Iran at 8:00 a.m. ET.
Investors will receive a few economic data points this morning, including the March Consumer Confidence report (Briefing.com consensus 88.0; prior: 91.2).
The market will also hear from Fed Governor Michelle Bowman (voting FOMC member), Fed Governor Michael Barr (voting FOMC member), and Chicago Fed President Austan Goolsbee (nonvoting FOMC member). Notably, Fed President Jerome Powell (voting FOMC member) said yesterday that inflation expectations remain well anchored beyond the near term, which led to a sharp drop in market-implied probabilities of a rate hike later this year.
(Michael Gibbs, Managing Director, Lead Portfolio Manager |)
Markets:
The S&P 500 traded in a wide range and closed lower at 6,343.72, breaking below the key support level at 6,360.58. This shift puts that level back into play as near-term resistance. Despite the weakness, market internals are now approaching oversold territory, increasing the probability of a near-term bounce.
For any rally to gain traction, the index will need to reclaim 6,360.58 on a closing basis, supported by strong breadth—specifically, 80% or greater up volume—to signal that buyers are stepping back in with conviction.
So far this morning, S&P 500 futures are higher by 1.20%, suggesting an opening bounce that could bring the index just below the next resistance level at 6,473.52. That level will be important to watch, as sellers may re-emerge if the rally lacks volume confirmation.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Partner, DJWMG
Windsor Wealth Planners & Strategists
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The percentage of stocks trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving averages are used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term ones. Signals can be derived from overbought/oversold levels, crosses above/below 50%, and bullish/bearish divergences.
The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author, John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
This is not a recommendation to buy or sell any company’s stock mentioned above.
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The Nasdaq 100 (^NDX) is a stock market index made up of 103 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. It is based on exchange and not an index of U.S.-based companies.
The Russell 2000 Index is a stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index. It is managed by London’s FTSE Russell Group and is widely regarded as a bellwether of the U.S. economy because it focuses on smaller companies that focus on the U.S. market.
The NYSE advance/decline measure refers to the number of common stocks listed on the New York Stock Exchange (NYSE) that close at a higher price than their previous closing price (“advancing issues”) compared to the number of NYSE-listed common stocks that close at a lower price than their previous closing price (“declining issues”) during a specified trading session.
This measure is used as an indicator of market breadth and reflects the extent to which price movements are broadly distributed among NYSE-listed securities.