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Morning Brief

May 25th, 2021

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Headline News:

Wall Street is set for a higher open after bond yields moved lower, propping up beaten-down mega-cap technology stocks. The yield on the U.S. 10-year bond moved to a two-week low, and Amazon(AMZN), Apple(AAPL), and Alphabet(GOOGL) were all up between 0.4%-1% in the pre-market. The lower bond yields help take the pressure off growth stocks whose cash flows are discounted at higher bond yields. Later today, the U.S. consumer confidence report will be released and is expected to move lower after a 14-month high in April.

Markets:  

The S&P 500 moved past resistance at 4191.31, closing higher at 4197.05. However, the trading came on much lower volume of 1,841,332,224 shares traded. So, we can’t claim there is a new uptrend just yet due to a lack of overall participation yesterday. The RSI did move higher in support of the up move, closing at 56.92 and solidly above the middle line. The index needs a high volume day and another close above 4191.31 soon to keep the recent rally going.

We are currently long-term bullish and short-term cautious.

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John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Partner, DJWMG
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.

 

This is not a recommendation to buy or sell any company’s stock mentioned above.

 

US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value.  US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government.  Bond prices and yields are subject to change based upon 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.

 

The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. Three thousand households across the country are surveyed each month. In general, while the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month.

 

 

 

 

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