The major indices had a strong session to close out last week. Some surprisingly good earnings reports helped buoy the markets, in additional to general enthusiasm towards key economic metrics. Still, the benchmarks are still down for the year; thus, investors wonder which side will show up?
Here are three things to look out for in the markets this week!
Critical Moment for the Dow Jones Industrial Average
On last Friday’s session, the Dow Jones gained 1.39% against the prior, which was a much-needed confidence boost. However, the index still feel short against the week’s April 30th opener of 24,410 points. To reassure concerned investors, the markets must prove that the last trade was no fluke.
That’s going to be a tough challenge. On a year-to-date basis, the Dow Jones is still off breakeven by a 2.2% margin. Moreover, the benchmark index is sandwiched between the 50 day moving average at the top, and the 200 DMA at the bottom.
Based on what we’ve seen, I’m not too confident that we’ll get too many positive reads. If anything, I see more meaningless sideways trading action.
Gold Price Stuck in Limbo
The much-embattled gold price closed out last week with a mediocre lift of only 0.15%. For the week, the bullion markets were slightly below parity.
Unfortunately, that’s not the result that many investors are looking for. A tough pill to swallow is the recent resurgence of the U.S. Dollar Index, which has gained 3.7% since mid-April. That said, dollar strength veritably tanked since Trump’s inauguration, so the dichotomy is strange, to say the least.
For the nearer-term, the gold price looks to suffer more mediocre trading activity. Like the Dow Jones, gold is sandwiched between the 50 and 200 DMAs. However, the bullion sector’s technical posture is significantly weaker than equities.
Crude Oil on the Charge!
The one investment class that has performed unquestionably well is crude oil. For the week, the benchmark West Texas Intermediate index gained 2.3%. For the year, crude oil is up nearly 16%.
With the driving season coming up, investors should expect more of the same. While the bullish pace may slow down, the resurgence of crude oil appears to be the real deal.