Futures for the Dow Jones industrial average, S&P 500 index and Nasdaq 100 were little changed late Wednesday, though a report broke late that Special Counsel Robert Mueller is now investigating President Trump himself.
On Wednesday, stocks closed mixed following the Federal Reserve’s interest rate hike and hawkish outlook. Financials rallied into the close, with Citigroup (C) and Comerica (CMA) holding buy points while Bank of America (BAC), JPMorgan Chase (JPM), Morgan Stanley (MS) and American Express (AXP) are near entries.
XAutoplay: On | Off During Wednesday’s regular session, the Dow industrials hit a record high early and rallied to close up 0.2%. The Nasdaq composite fell 0.4% as Apple (AAPL) and other big-cap techs resumed their retreat. The S&P 500 index dipped 0.1%, with energy stocks tumbling with oil prices.
Special Counsel Mueller is now investigating whether Trump attempted to obstruct justice, the Washington Post reported. That’s part of his expanding investigation that initially focused on whether Trump campaign aides colluded with Russia officials over meddling with the 2016 presidential election. Separate reports said that Trump had considered firing Mueller recently.
Trump’s growing political woes generally have not had a big impact on financial markets so far. Dow and S&P 500 futures were just below fair value Wednesday evening, with Nasdaq 100 futures off 0.1%.
Meanwhile, Citigroup, JPMorgan Chase and many other financials are once again looking better, investors should be cautious. First, the market uptrend is under pressure, which means being wary of making new bets of any kind. Meanwhile, the relative strength lines of bank stocks are largely moving sideways with the S&P 500. That’s been trend for many years. Banks may outperform for brief periods, but generally move with the broader market.
IBD’S TAKE: Citigroup, Bank of America, JPMorgan Chase and Morgan Stanley are all part of IBD’s Money Center group. To see how they stack up against one another and against objective criteria, go to IBD’s Stock Checkup.
Citigroup broke past a 62.63 flat base buy point last week, and has held on this week. Citi fell to 63.50 intraday, but rebounded to close up 3 cents at 63.72.
On Tuesday, Citi became the latest Wall Street giant to warn of weak Q2 trading revenues.
Bank of America
Bank of America regained its 50-day moving average on Monday, but tested that support Wednesday. By the close, BofA lost just a penny, at 23.76. The stock has a potential aggressive buy point of 24.45, with a conventional flat base entry of 25.90.
JPMorgan Chase also tested its recently recaptured 50-day line Wednesday, but closed at 87.09, down just 0.2%. The Dow Jones industrial average component has an 89.23 double-bottom buy point in play.
American Express, also a Dow component and the lone credit card play on this list, rallied to close up 0.3% at 80.84. American Express has an 82.10 buy point in sight.
Comerica, a superregional bank, cleared a 73.51 entry on Tuesday. On Wednesday, shares dropped to 72.59 intraday before reversing higher for a 0.5% gain at 74.26.
The Federal Reserve signaled Wednesday that it will keep raising rates and will begin to rein in its massive $4.5 trillion balance sheet by year-end. Investors took that as a sign that interest rates will rise and spreads will widen, which would bolster banks’ profits. Meanwhile, the Fed will issue stress test results on key financials later this month, following up with its appraisal of dividend and buyback plans. Banks are expected to have little trouble with those oversight exams. Any negative surprises, or unexpectedly big shareholder return programs, could swing individual stocks.