S&P 500; US Indexes Fundamental Forecast – January 11, 2017

The three major stock indices closed mixed again on Tuesday as investors had very few fresh economic reports to react to ahead of President-elect Donald Trump’s first press conference since the election on Wednesday.

Technology buyers continued to support the NASDAQ Composite, but lower oil prices once again created uncertainty for Dow and S&P 500 Index investors.

The blue chip Dow Jones Industrial Average finished at 19855.53, down 31.85 or -0.16%. The benchmark S&P 500 Index closed at 2268.90, unchanged, a pretty rare occurrence and the NASDAQ Composite ended the session at 5551.82 after hitting a new record high, up 20.00 or 0.36%.

Investors struggled on Tuesday with the markets posting a two-sided trade. This tends to indicate uncertainty and trader indecision.

In economic news, the NFIB Small Business Index came in at 105.8, beating the estimate at 99.6 and the previous 98.4. The JOLTS Job Openings report came in at 5.54 million, slightly below the 5.59 million estimate, however, more than the previous read of 5.45 million. Lastly, Final Wholesale Inventories rose 1.0%, higher than the expected and previous 0.9%.

Forecast

Trading could be slow early in the session on Wednesday as investors await Trump’s press conference that is tentatively scheduled for 1600 GMT. Traders are mixed about the event. Some feel it will be a dud because journalists could ask questions on about any topic. Some feel that Trump is a wildcard and anything can come out of his mouth that could create volatility.

Ideally, investors would like to hear his responses to questions about his plans to rebuild American, cut taxes and loosen banking regulations. However, he is more likely to field questions on the repealing of Obamacare, the Russian hacking incident and his conflicts of interest.

With the exception of the NASDAQ, the other major indexes look tired and some investors may use Trump’s press conference as an excuse to book profits and to lighten up few of their long positions.

The direction of the indexes today is essentially a coin toss because no one is certain how Trump will react to questions at the press conference. That’s why all we can say for today is to count on volatility.