Global Markets Dip, Major U.S. Banks Set to Kick Off Earnings Season

by Vlad Karpel

Inflation and corporate earnings take center stage this week as markets react to the latest comments from Fed Chair Jerome Powell and gear up for the next earnings season. U.S. Benchmarks snapped a positive winning streak as all three major U.S. indices closed in the red to start the trading week. Markets appear to be reacting to the latest comments from Fed Chair Powell, although somewhat positive in forecasting a strong start to the second half of 2021, that a rise in inflation could occur before a full market recovery. Likewise, look out for additional data on the topic in this week’s Beige Book release as well as tomorrow’s monthly Core CPI report.

 

Corporate earnings season kicks off this week with major banks releasing near week’s end as this week’s key releases include JPMorgan Chase, Wells Fargo, Goldman Sachs, Bank of America, Citigroup, Morgan Stanley, as well as non-bank releases such as Delta Air Lines, PepsiCo, and UnitedHealth Group. Overseas, we are seeing several COVID-related developments as the U.K. continues to open up its economy while Germany has imposed new national restrictions. Globally, both Asian and European markets closed in the red.

 

Last week, the SPY was able to break out above the $400 level across all asset classes and our models are projecting the SPY to trade in the range of $385-$420 for the next 6 weeks. $SPY broke above the $400 level following the recent rebound and deteriorating momentum behind treasury and currency markets. The DXY sold off and the TLT continues to trade in the range. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:

Key U.S. Economic Reports/Events This Week:

  • Federal Budget (March) – Monday
  • Consumer Price Index (March) – Tuesday
  • Core CPI (March) – Tuesday
  • Import Price Index (March) – Wednesday
  • Beige Book – Wednesday
  • Weekly Jobless Claims (4/10) – Thursday
  • Retail Sales (March) – Thursday
  • Industrial Production (March) – Thursday
  • Capacity Utilization (March) – Thursday
  • Business Inventories (February) – Thursday
  • Building Permits (March) – Friday
  • Housing Starts (March) – Friday

Upcoming Earnings:

  • BBBY – Bed Bath & Beyond – Wednesday
  • JPM – JPMorgan Chase – Wednesday
  • GS – Goldman Sachs – Wednesday
  • WFC – Wells Fargo – Wednesday
  • BAC – Bank of America – Thursday
  • SCHW – Charles Schwab – Thursday
  • C – CitiGroup – Thursday
  • DAL – Delta Air Lines – Thursday
  • PEP – PepsiCo – Thursday
  • UNH – UnitedHealth Group
  • TSM – Taiwan Semiconductor – Thursday
  • CFG – Citizens Financial – Friday
  • MS – Morgan Stanley – Friday
  • PNC – PNC Financial Services – Friday

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For reference, the S&P 10-Day Forecast is shown below:

Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Prediction data uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.


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Tuesday Morning Featured Symbol

Our featured symbol for Tuesday is Ingersoll Rand Inc. (IR). IR is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.

The stock is trading at $50.15 with a vector of -0.17% at the time of publication.

10-Day Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows the expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.

*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, IR. Our featured symbol is part of your free subscription service. Not included in any paid Tradespoon subscription service. Vlad Karpel only trades his money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, or MonthlyTrader recommendations. If you are interested in receiving Vlad’s picks, please click here.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) priced at $59.56 per barrel, up 0.39% at the time of publication.

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Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $40.53 at the time of publication. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


Gold

The price for the Gold Continuous Contract (GC00) is down 0.26% at $1738.50 at the time of publication.

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Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $159.96 at the time of publication. Vector signals show +0.05% for today. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


Treasuries

The yield on the 10-year Treasury note is up, at 1.745% at the time of publication.

The yield on the 30-year Treasury note is up, at 2.414% at the time of publication.

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Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


Volatility

The CBOE Volatility Index (^VIX) is $19.4 at the time of publication, and our 10-day prediction window shows positive signals. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session

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