The S&P 500 futures trade 23 points, or 0.6%, above fair value as buying interest from the prior two days carries over in front of the FOMC policy decision this afternoon.
The Fed is expected to raise the target range for the fed funds rate by 50 basis points and formally present a plan to reduce its balance sheet. The policy statement will be released at 2:00 p.m. ET, followed by Fed Chair Powell’s press conference at 2:30 p.m. ET, which investors will tune in for any hints on how aggressive the Fed plans to be in the future with its tightening plans.
In the meantime, there’s been a bunch of earnings news to sift through. Advanced Micro Devices (AMD 96.62, +5.49, +6.0%), Airbnb (ABNB 152.56, +7.56, +5.2%), Starbucks (SBUX 79.06, +4.73, +6.4%), and Moderna (MRNA 158.50, +11.96, +8.2%) are some of the standouts.
Lyft (LYFT 23.08, -7.68, -25.0%), on the other hand, has tanked 25% in pre-market action on downside Q2 revenue guidance.
On the data front, investors will receive the ADP Employment Change report for April (Briefing.com consensus 390,000) at 8:15 a.m. ET, the Trade Balance for March (Briefing.com consensus -$97.5 bln) at 8:30 a.m. ET, and the ISM Non-Manufacturing Index for April (Briefing.com consensus 58.7%) at 10:00 a.m. ET.
U.S. Treasuries trade mixed. The 2-yr yield is up two basis points to 2.78%, and the 10-yr yield is unchanged at 2.96%. The U.S. Dollar Index is down 0.1% to 103.36. WTI crude futures are up 4.1%, or $4.18, to $106.61/bbl.
(Michael Gibbs, Director of Equity Portfolio & Technical Strategy)
The S&P 500 closed higher for the second day and moved past resistance at 4157.87. Again, the trading came with only an average volume of 2,500,972,032, but the Advance/Decline index moved substantially higher in support of the higher close. Today, the markets could be on hold unit the release of the Federal Reserve interest decision this afternoon. Unless there is a major surprise from the Fed, the S&P 500 looks promising to try and move higher today. Potential resistance could come in at 4124.28, but we don’t see that being tested this week, and possible support will now be at 4157.87.
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 Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index.
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.