After the Dow Jones Industrial Average hit new lows for the year Thursday, the index has extended losses and is down about 3.9 percent for the week and near 10 percent for the month, baring a big rebound Monday. Meanwhile, the Standard & Poor’s 500 Index is down about 3.1 percent for the week, and 8.8 percent for the month.
Category: Market Updates – Kristina Zurla Landgraf – 8:41 am
August crude oil futures hit a new record high above $142 a barrel in electronic trading, attributed to a decline in the U.S. dollar as well as comments from OPEC’s president that prices could top $150 a barrel this year. There is also speculation the European Central Bank might raise interest rates when it meets on July 3, to the further detriment of the greenback. Crude oil has gained more than 47 percent this year.
The Federal Reserve left interest rates steady as expected, but policymakers’ statements on the economic outlook caused frenzied post-meeting trade. Stock index futures quickly rose after the Fed said downside risks to U.S. economic growth have “diminished somewhat” but the market also was cognizant of statements of upside risks to inflation that tempered enthusiasm. September S&P futures hit an intraday high of 1337.75, although lost some steam into the close and ended up 7.10 at 1322.0. Preliminary volume in the E-mini S&P shows more than 2 million contracts traded. The market has slipped further in after-hours trade.
Lind Plus Senior Market Strategist Tim Evans expects more volatility in the U.S. dollar. He recommends approaching this market with an options strategy. Read the full article for details on this strategy.
If you missed Tim’s webinar where he explained this strategy, you can view it below. And don’t forget to register for our weekly Markets on the Move webinar, every Monday at 3:30 p.m. CT.
Market participants are anxiously awaiting the result of the two-day Federal Open Market Committee Meeting, where the direction of short-term interest rates will be decided. Expect an announcement around 1:15 p.m. CT. CME Group Fed funds futures are pricing in a 90 percent probability the Fed will leave its key short-term interbank rate (Fed funds) unchanged at 2 percent. Lind Plus Senior Market Strategist Jeff Friedman says traders of financial futures can expect thin and choppy action–then an explosion after the announcement. He recommends day traders stay out until the dust clears, but says in the September S&P futures contract, look for support at 1279. A move above the 20-day moving average at 1362 would signal a recovery, but for now, momentum indicators are bearish, even if oversold.
Despite a possible short-term bounce after three losing sessions, Lind Plus Senior Market Strategist Phil Streible sees technicals and fundamentals for orange juice as longer-term bearish. He gives his view on the market and offers an options trading strategy to consider. The September ICE futures contract was last at $1.1320 per pound, and November at $1.1640. Full article
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