I predict a stock market rise on Thursday, due to current investor sentiment regarding the new unemployment claims report and earnings reports released by Wall Street giants Ford (NYSE:F), 3M (NYSE:MMM) and United Airlines (NYSE:UAL) this morning.
Stock markets slumped into the red yesterday after a new S&P 500 (NYSEARCA:SPY) record on Monday, with the S&P 500 (NYSEARCA:SPY) losing .47%, the Dow Jones Industrial Average (NYSEARCA:DIA) losing .35%, the NASDAQ 100 (NASDAQ:QQQ) losing .57%, and the Russel 2000 (NYSEARCA:IWM) losing .42%.
Monday was the last day I wrote a stock market prediction article, and I barely called a correct day with a .01% rise out of the S&P 500 (NYSEARCA:SPY) and a .15% rise for the NASDAQ 100 (NASDAQ:QQQ). I was incorrect with the Dow Jones Industrial Average (NYSEARCA:DIA) and the Russel 2000. Despite Monday and Tuesday’s relief rally after last week’s Congressional upheaval, I am not surprised that markets dumped yesterday, considering how high the S&P 500 (NYSEARCA:SPY) finished compared to historic levels.
For Thursday, I predict a stock market rise because of the positive jobs report and earnings reports released this morning. According to the Department of Labor, jobless claims fell by 12,000 for the 3rd week of October, and Wall Street favorites Ford (NYSE:F), 3M (NYSE:MMM) and United Airlines (NYSE:UAL) all reported positive Q3 earnings reports. Although a drop of 12,000 jobless claims to 350,000 total claims is not a good number and although the earnings reports were positive, these bits of news are likely to sway investor sentiment into the green for today.
From a technical perspective, the S&P 500 (NYSEARCA:SPY) may be facing a correction, as the RSI has begun to dip, despite an incredibly robust MACD. Although the bulls still appear to be in charge, the 9 day MACD has started to dip as well, suggesting an overall change in momentum. If alleged “good” news continues to spew out from Wall Street however, we could be seeing higher prices ahead:
Internationally, the Nikkei 225 Index (NYSEARCA:FXY) finished in the green with a .42% rise and the Hang Seng (NYSEARCA:EWH) lost .42%. European markets are currently trading in the green at the time of this writing, with the FTSE 100 (NYSEARCA:EWU), DAX (NYSEARCA:EWG) and CAC 40 (NYSEARCA:EWQ) all suggesting a green day on Wall Street today.
US Future Markets are also trading in the green as of the time of this writing, further suggesting the positive investor sentiment on Wall Street this morning.
The VIX Index (NYSEARCA:VXX) suggests a negative stock market today, as the VIX added an additional .68% to finish at 13.42 yesterday. The merchant of fear appears to be getting fearful again, which suggest more negative equity market prices ahead.
US Treasury Bond prices suggest lower stock markets as well, with the 30 Year US Treasury Bond Index (NYSEARCA:TLT) adding .31% yesterday, suggesting more investor movement from equities into bond markets. Whether or not this trend continues is anyone’s guess, but investors do seem to be more in “hedge” mode rather than “risk” mode.
Gold (NYSEARCA:GLD) and Oil prices (NYSEARCA:USO) definitely followed the equity market trend yesterday, with spot gold (NYSEARCA:GLD) declining .58% to close at $1332.5 per ounce and with spot oil (NYSEARCA:USO) losing 1% even to close at $97.13 per barrel.
Hot stocks to watch for from yesterday include Corning (NYSE:GLW) and JC Penny (NYSE:JCP), which moved up 14.41% and 7.48%, respectively. Cool stocks to watch for from yesterday were led by Microsoft (NASDAQ:MSFT) which dropped 2.37% before its earnings report release today (not good), and Bank of America (NYSE:BAC) lost 2.13% yesterday.
As mentioned earlier, this morning brings us a heavy amount of economic reports an earnings reports, including the weekly jobless claims, Markit flash PMI, trade deficit, and New home sales reports; plus earnings reports from Wall Street giants Ford (NYSE:F), 3M (MMM), Amazon (NASDAQ:AMZN), Dow Chemical (NYSE:DOW) and United Airlines (NYSE:UAL). So far Ford (NYSE:F), 3M (NYSE:MMM), and United Airlines (NYSE:UAL) have all reported positive earnings, and investors seem content with the lowered 350,000 jobless claim rate, which dropped 12,000 claims for the third week of October. The Markit flash PMI report just released however suggests a stock market fall, since the index fell from 52.8 to 51.1 for September, its lowest level in 12 months. Readings above ’50′ indicate growth. All in all, the news appears to suggest positive market sentiment so far.
And, for our fun fact of the day: according to CNN.com, the decommissioned USS Forrestal aircraft carrier was just sold to a scrap company for the whopping price of one penny. 1 cent! What an investment?
Bottom line: I predict a stock market rise for this morning considering the new jobless claims report plus positive earnings from Wall Street. Even though the technicals keep suggesting a huge stock market rollover, investors just may feel positive for today.
Disclosure: This stock market forecast is for educational and informational purposes only. It is not intended to be investment advice nor an investment recommendation. Past performance is no guarantee of or indication of future performance and your performance may vary widely from any that may be indicated in this column. There is risk of loss in all investing and trading activities and you should consult your financial adviser before making any investment decisions.