Morning Brief
Headline News:
Equity futures point to a firmly higher opening this morning as oil prices and Treasury yields retreat to start the week, with crude oil down roughly 2.5% to under $98 per barrel and the 10-year note yield down to 4.95%.
The market has been largely driven by oil and yields, as well as the performance of AI-related stocks in recent sessions, driving some choppy action last week that saw the Nasdaq Composite rise by 0.7%, while the DJIA slid 1.7%, its worst week since March.
Those themes remain in focus following last week’s FOMC rate hike, with the simultaneous pullback in oil and Treasury yields providing a favorable backdrop for equities this morning. On the geopolitical front, President Trump threatened another attack on Iran but said he remains open to meeting Iranian President Masoud Pezeshkian during this week’s United Nations General Assembly, according to CNBC. The potential for diplomacy comes as U.S.-Iran tensions remain an important influence on oil markets.
Strength is also extending to cryptocurrencies, with Bitcoin crossing the $85,000 mark to reach its best level since January.
The economic data calendar is relatively light this week following last week’s Fed decision, although President Trump and Chinese President Xi Jinping are scheduled to meet later this week, putting U.S.-China trade relations in focus. There is no economic data of note today.
(Michael Gibbs, Managing Director, Lead Portfolio Manager )
Markets:
The S&P 500 rallied sharply on Friday, but sellers emerged near the 20-day moving average at 7,658.89, and the index closed at 7,650.50. The 20-day moving average will begin today as potential resistance. However, S&P 500 futures are higher by 0.66%, indicating an opening above that level. If the breakout holds, the next potential resistance level would be 7,771.48. Notably, the RSI closed at 50.71 and is positioned to break out of its recent downtrend, which could attract additional buyers during today’s trading.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Partner, DJWMG
Windsor Wealth Planners & Strategists
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 due to underlying commodity 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 the underlying index’s internal strength or weakness. 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 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 Russell 3000 Index’s total market capitalization.
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 by 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 comprising 103 equity securities of 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 tracks smaller companies that operate in the U.S. market.
The NYSE advance/decline measure refers to the number of common stocks listed on the New York Stock Exchange (NYSE) that close at a higher price than their previous closing price (“advancing issues”) compared to the number of NYSE-listed common stocks that close at a lower price than their previous closing price (“declining issues”) during a specified trading session.
This measure serves as an indicator of market breadth and reflects the extent to which price movements are broadly distributed across NYSE-listed securities.