U.S. stock futures are higher this morning as the U.S. and China Phase 1 trade deal is set to be signed on Wednesday. Also, earnings season starts this week, and investors will be watching to see how companies faired in the fourth quarter of 2019. This week JPMorgan (JPM), Morgan Stanley (MS), and Goldman Sachs (GS) are the big names reporting. Analyst are expecting profits at S&P 500 companies to drop 0.6% due to the effects of the trade war.
The S&P 500 closed lower on Friday at 3265.35 after briefly trading at potential support at 3258.14. So, we now know buyers are willing to step in at that level to support stocks. The RSI index moved lower below the 70 level to close at 67.69, and this is a potential short term sell signal. If the index can remain above support, we continue to believe a potential new leg higher is the next move.
We are currently long-term bullish and short-term bullish.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Dominguez & Jones Wealth Management Group
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
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.