Cautious Investors Remain on Sidelines

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The market advanced for the second day in a row on Tuesday, as investors pushed stocks cautiously higher ahead of the Brexit vote. The results of the U.K.’s referendum on whether to stay in the European Union should be known Friday morning.

The upcoming Brexit vote also seemed to overshadow Federal Reserve Chair Janet Yellen’s semiannual testimony before the Senate Banking Committee. Yellen’s tone was somewhat cautious with regard to future interest rate hikes, and the assumption is that there will be at least one more before Dec. 31.

Energy was the best-performing sector, up 1.2%, despite a 1.1% drop in crude oil to $48.85 a barrel. Other notable gainers included technology (+0.6%) and financials (+0.5%).

Gold lost 1.5% at $1,270.50 an ounce, and the U.S. dollar gained slightly against a basket of currencies.

At Tuesday’s close, the Dow Jones Industrial Average gained 25 points at 17,830, the S&P 500 rose 6 points to 2,089, the Nasdaq was up 7 points to 4,844, and the Russell 2000 fell 4 points to 1,154.

The NYSE Composite’s primary exchange traded 854 million shares with total volume of 3.2 billion. The Nasdaq crossed 1.7 billion shares. On the Big Board, advancers outpaced decliners by 1.3-to-1, and on the Nasdaq, decliners led by 1.3-to-1. Block trades on the NYSE fell to 4,827 from 5,070 on Monday.

IWM Chart
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Chart Key

The small-cap iShares Russell 2000 Index (ETF) (IWM) found support last week at the 50-day moving average at $113. However, since then, IWM has been fluctuating around the support line at $115 on relatively high negative volume. And MACD is on a sell signal.

Looking back, IWM has had problems in the $112 to $120 range all year.

Conclusion

Investors seem to be in a trance waiting for the results of the Brexit vote. However, even if they get the outcome they want, other risks are looming. These include slowing jobs growth, falling corporate earnings and uncertain signals from the Federal Reserve regarding monetary policy.

With one problem at a time to solve and the future fuzzy, is it any wonder average investors are on the sidelines?

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.


Article printed from InvestorPlace Media, https://investorplace.com/2016/06/daily-market-outlook-cautious-investors-remain-sidelines/.

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