Morning Brief
Headline News:
The S&P 500 futures trade roughly in-line with fair value in a relatively quiet session. Investors are waiting for key data on the services sector, speeches from several Fed officials, and any new sanctions against Russia for its alleged war crimes.
The Treasury market remains a focal point, as the 2s10s spread has un-inverted. The 2-yr yield is up four basis points to 2.46% amid rate-hike expectations, and the 10-yr yield is up five basis points to 2.46% amid inflation expectations.
Oil prices are still trading over $100 per barrel ($103.75, +0.47, +0.5%) while the U.S. Dollar Index (98.94, -0.06, -0.1%) is weaker.
On the data front, investors will receive the Trade Balance for February (Briefing.com consensus -$88.5 billion) at 8:30 a.m. ET and the ISM Non-Manufacturing Index for March (Briefing.com consensus 58.5%) at 10:00 a.m. ET.
Today’s lineup of Fed speakers includes Minneapolis Fed President Kashkari (alternate voter) at 10:00 a.m. ET, Fed Governor Brainard (FOMC voter) at 11:05 a.m. ET, and New York Fed President Williams (FOMC voter) at 2:00 p.m. ET.
(Michael Gibbs, Director of Equity Portfolio & Technical Strategy)
Markets:
The S&P 500 traded higher on average volume of 2,275,884,800 and closed at 4582.64. The index is now just under potential resistance at 4590.03, which could be tested today. We continue to believe the two-day selloff last week was enough of a break in the uptrend for buyers to now step back in again. Possible support will remain at 4522.00, and potential resistance remains at 4590.03. If the index can form a base here and trade in between support and resistance for a few days, we feel the uptrend can continue soon.
We are currently Intermediate-term bearish and short-term bullish.
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 advance/decline line (A/D) is a technical indicator that plots the difference between the number of advancing and declining stocks on a daily basis. The indicator is cumulative, with a positive number being added to the prior number, or if the number is negative it is subtracted from the prior number.
The A/D line is used to show market sentiment, as it tells traders whether there are more stocks rising or falling. It is used to confirm price trends in major indexes, and can also warn of reversals when divergence occurs.
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 average is used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term timeframes. Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences.
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.