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LIVE MARKETS U.S.-Gold/Silver miners: Being pinched on the charts

Published 2019-04-11, 11:34 a/m
LIVE MARKETS U.S.-Gold/Silver miners: Being pinched on the charts
NDX
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XAU/USD
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US500
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DJI
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JPM
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WFC
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GC
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XAU
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VXN
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* Dow, S&P edge up; Nasdaq dips

* 9 of 11 sectors higher; industrials, financials lead

* Real estate, healthcare lower

April 11 - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Chuck Mikolajczak. Reach him on Messenger to share your thoughts on market moves: charles.mikolajczak.thomsonreuters.com@reuters.net

GOLD/SILVER MINERS: BEING PINCHED ON THE CHARTS (1128 EDT/1528 GMT)

The Philadelphia SE Gold/Silver Index .XAU , made up of major mining companies, is down more than 1% on Thursday as spot gold XAU= is down about 1% on the session, and breaking back under the $1300 level.

On the charts, XAU index upside continues to be hindered by its descending 100-week moving average (WMA) which is acting as resistance at 78.34. The index last recorded a weekly close above this long-term moving average in late-January 2018 so it remains a formidable barrier. On the downside, the index is being supported by its rising 12-WMA, now at 75.81. The 12-WMA has held on a weekly closing basis since early December of last year.

Thus, once the contracting range between the two moving averages, which is now down to just 2.54 points or just a little over 3% around last Friday's close, is resolved with a weekly closing break, the XAU index's next trend of significance may emerge.

One factor tilted toward the bear side is waning momentum: the MACD topped shy of its summer 2016 high, and is rolling over. Meanwhile, another near-term bearish consideration remains spot gold's weighty chart. Gabriel)

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WITH EARNINGS, NOT MUCH MARGIN FOR ERROR (1003 EDT/1403 GMT)

First-quarter earnings reports from U.S. companies are going to start pouring in on Friday, with JP Morgan Chase (NYSE:JPM) JPM.N and Wells Fargo (NYSE:WFC) & Co WFC.N releasing their results.

With S&P 500 profits overall currently expected to decline by 2.5% from the 2018 first quarter, Jeffrey Schulze, investment strategist at ClearBridge Investments, is closely watching one thing in particular.

"Margins (are) going to be front and center," Schulze told Reuters in an interview.

The first-quarter net profit margin for the S&P 500 is expected to be 11.2%, which is down from 12.3% in the first quarter of 2018, according to the most recent IBES data from Refinitiv. The margin decline is pressuring profits, even as S&P 500 revenue is expected to rise by 4.8% for the first quarter. guidance suggests that margins are going to continue to depress from here due to higher input costs, higher wage costs, I think the markets are going to sell," Schulze said.

For the full year, S&P 500 margins are expected to shrink to 11.9% from 12.4% in 2018.

Here is a detailed look at expected margins, courtesy of IBES data from Refinitiv:

(Lewis Krauskopf)

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S&P 500: CRUNCH TIME (0908 EDT/1308 GMT)

The S&P 500 .SPX action has been quiet of late. In fact, the two tightest intraday ranges of the year have occurred over the past 4 trading days. As a result, historical volatility readings on an hourly basis have collapsed to their lowest level since late February. Thus, the index may be ripe for more spirited action. (Click on chart below)

Indeed, given the past week's lateral trade, hourly Bollinger Band width readings have become especially compressed. Low band width in itself does not predict direction.

It does, however, suggest a market ripe for wider swings, or trend. Thus, the SPX on a shorter-term basis, can see a range burst. the band width low in late-February, the SPX rose 1.2% over the next two trading days and then slid 3.4% over the next four trading days. Slightly tighter readings in late-September, of course, preceded a sustained October swoon.

Meanwhile, in terms of Nasdaq .NDX implied volatility .VXN , storm clouds may be forming. Gabriel)

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https://tmsnrt.rs/2VxSJJn S&P 500 margins

https://tmsnrt.rs/2VyXouy XAU04112019

https://tmsnrt.rs/2VCqh9p

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