The S&P 500 futures trade roughly in-line with fair value in a busy news morning before the market closes for Good Friday tomorrow.
Starting with earnings news, UnitedHealth (UNH 539.80, +2.80, +0.5%) and Goldman Sachs (GS 328.68, +6.71, +2.1%) each beat top and bottom-line estimates, while Wells Fargo (WFC 46.88, -1.66, -3.4%) trades lower by 3% after missing revenue estimates.
Twitter (TWTR 49.09, +3.22, +7.0%), meanwhile, is up 7% after Elon Musk offered to acquire the company for $54.20 per share in cash. Twitter said it will carefully review the proposal, which is Mr. Musk’s “best and final offer.”
Elsewhere, the European Central Bank made no changes to interest rates, as expected, and said incoming data since its last meeting reinforced expectations for net asset purchases under the APP should be concluded in the third quarter.
In economic data, Retail Sales for March (Briefing.com consensus 0.6%), weekly Initial Claims (Briefing.com consensus 175,000), and Import and Export Prices for March will be released at 8:30 a.m. ET, followed by the preliminary University of Michigan Index of Consumer Sentiment for April (Briefing.com consensus 58.8) and Business Inventories for February (Briefing.com consensus 1.3%) at 10:00 a.m. ET.
U.S. Treasuries are up for the third straight day, pushing yields slightly lower. The 2-yr yield is down one basis point to 2.33%, and the 10-yr yield is down two basis points to 2.67%. The U.S. Dollar Index is down 0.2% to 99.68. WTI crude futures are down 1.2%, or $1.25, to $103.04/bbl.
(Michael Gibbs, Director of Equity Portfolio & Technical Strategy)
The S&P 500 rallied past the 50-day moving average at 4422.32 and closed higher at 4446.59. The trading came with below-average volume with only 2,167,769,6000 shares traded. However, RSI turned higher, and the Advance/Decline line moved sharply higher, both good indicators the rally could continue soon. Due to the three-day weekend, Tody’s trading should be low volume, so we will not put much stock in today’s action. Potential support could come in at the 50-day moving average, and possible resistance could come in at 4450.05.
We are currently Intermediate-term bearish and short-term bearish.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
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.