Morning Brief
Headline News:
The S&P 500 futures are down nine points and are trading 0.2% below fair value, the NASDAQ 100 futures are down three points and are trading fractionally below fair value, and the Dow Jones Industrial Average futures are down 88 points and are trading 0.2% below fair value.
There’s a negative bias in early trading, but true to this week’s form, there’s not a lot of conviction fueling the activity. Market participants are still in wait-and-see mode in front of earnings after the close.
The weekly MBA Mortgage Applications Index jumped 1.9% after last week’s 0.5% increase. Other data today include the Existing Home Sales report for April at 10:00 ET and the weekly EIA Crude Oil Inventories at 10:30 ET. The Minutes for the April 30-May 1 FOMC meeting will be released at 2:00 ET.
Treasury yields are higher in front of the data and the Minutes. The 10-year note yield is up four basis points to 4.45%, and the 2-year note yield is up four basis points to 4.87%.
Elsewhere, commodity prices are lower this morning. WTI crude oil futures are down 1.0% to $77.87/bbl, natural gas futures are down 0.1% to $2.67/mmbtu, and copper futures are down 3.2% to $4.94/lb.
(Michael Gibbs, Managing Director, Lead Portfolio Manager)
Markets:
The S&P 500 rallied up to resistance at 4,325.39 but could not break out, closing at 4,321.41. The index has failed three times at the 4,325.39 level, so each time, more and more sellers go away, making it easier to break out. However, we continue to believe that markets don’t have a catalyst to bring in more buyers, and the S&P 500 should remain in the current trading range. Nvidia (NVDA) will realize first-quarter earnings after the close of trading today, which could catalyze Thursday’s trading.
We are currently Intermediate-term bullish 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 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 averages are used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term ones. 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 stocks 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 represents 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 federal government’s timely payment of principal and interest. 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.
The Nasdaq 100 (^NDX) is a stock market index made up of 103 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. It is based on exchange and not an index of U.S.-based companies.
The Russell 2000 Index is a stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index. It is managed by London’s FTSE Russell Group and is widely regarded as a bellwether of the U.S. economy because it focuses on smaller companies that focus on the U.S. market.