Major Banks Kick Off Earnings Season, Markets Dip Following Latest Beige Book Release

by Vlad Karpel

 

While most U.S. stocks closed modestly lower, the Dow Jones finished in the green, snapping a two-day losing streak. Markets were reacting to the latest Beige Book, released by the Federal Reserve, which showed a moderate pace of growth through the first quarter of 2021 and expectation of similar economic activity through the spring. Vaccination progress provided a positive outlook while a slight increase in inflation is expected. Other key takeaways from the report include an impressive 900,000 jobs added in March while inflation rose to a multi-year high.

 

Additionally, markets saw movement following first-quarter earnings from JPMorgan Chase, Goldman Sachs, and Wells Fargo, essentially kicking off earnings season. Bank of America, Charles Schwab, Delta Air Lines, and PepsiCo headline tomorrow’s earnings releases. One symbol making waves today was COIN which officially went public as the first cryptocurrency exchange, valued at over $100 billion, and rose over 30% on its first day of trading. Weekly unemployment and monthly retail sales data are due on Thursday while Friday several key homebuilders reports will release. Globally, both European and Asian markets closed to mixed results.

 

At this point, the $SPY has reached our target of $415-$420 based on the 6-month forecast from our Stock Forecast Toolbox and we encourage readers to raise cash at this point. Last week, the SPY was able to break out above the $400 level across all asset classes, 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. Our models are projecting the SPY to trade in the range of $385-$420 for the next 6 weeks. 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:

  • 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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Thursday Morning Featured Symbol

Our featured symbol for Thursday is Bristol-Myers Squibb Company (BMY). BMY is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.

The stock is trading at $63.81 with a vector of -0.28% 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, BMY. 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 $62.75 per barrel, up 4.27% at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $40.9 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) down 0.64% at $1736.50 at the time of publication.

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 $162.28 at the time of publication. Vector signals show -0.12% 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 1.632% at the time of publication.

The yield on the 30-year Treasury note is up, at 2.318% at the time of publication.

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 $16.91 at the time of publication, and our 10-day prediction window shows negative 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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