U.S. stock futures are lower to start the day but are off the lows after a key inflation report was released. The personal consumption expenditures price index (PCE) showed a slow inflation rate in January. The lower increase was .03% for January and 1.5% year over year. The news sent the 10-year yields lower to 1.47% after they have risen to 1.6%. Meanwhile, Democrats continue to struggle with passing President Biden’s $1.9 trillion stimulus package. The bill was blocked when it was determined the $15 minimum wage hike could not be included in the current bill.
The S&P 500 traded in another wide-ranging day now sites just below potential support at 3830.41. The index moved through two support levels during the day to close lower at 3829.34. The next possible support level is the critical 50-day moving average at 3805.12. Volume was again huge with 2.918,171,904 shares traded, and RSI moved below the middle line to close at 45.76. So, a close below the 50-day could potentially bring in a new round of selling. A close above 3830.41 and, more important, 3870.90 would be good sign sellers have lost control.
We are currently long-term bullish and short-term cautious.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Windsor Wealth Planners & Strategist
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 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.