U.S. stock futures are higher this morning a day after the Nasdaq index moved into correction territory. European markets are positive, and Asian markets moved lower on more trade war fears. An investigation of the world’s internet and social media giants help bring tech stocks lower by 1.4% on Monday. Traders will be looking for a move higher on big volume to calm nerves after seven straight days of selling.
The S&P 500 sold off for the sixth day in a row on Monday. The selling came on above-average volume, and the index tested support at 2725 before rallying to end the day. RSI moved below the important 30 level to close at 29.91, so the index is now oversold and due for a move higher. Any buying in the future could be short-lived, so we will continue to remain cautious short term.
The U.S. PMI Manufacturing Index was reported at 50.5 on Monday, which was lower than April’s 52.6 reading. Consumer spending was flat at 0.0% for May but higher than the prior month’s report of -0.9%. The Ten-Year Treasury closed at 2.08% and is now 0.05% away from the 2017 low of 2.034%.
We are currently long term bullish and short term cautious.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Partner, Windsor Wealth
Dominguez & Jones Wealth Management Group
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, onions 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.
Bond prices and yields are subject to change based on market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. U.S. Government Bonds and Treasury Bills are guaranteed by the government, and if held to maturity, offer a fixed rate of return and guaranteed principal value. The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. The CBOE 10-Year Treasury Note (TNX) is based on 10 times the yield-to-maturity on the most recently auctioned 10-year Treasury note.