Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Opening Bell: Futures, Global Stocks Extend Rally On V-Shaped Recovery Hopes

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJun 03, 2020 06:40
ca.investing.com/analysis/opening-bell-futures-global-stocks-extend-rally-on-vshaped-recovery-hopes-200437171
Opening Bell: Futures, Global Stocks Extend Rally On V-Shaped Recovery Hopes
By Investing.com (Pinchas Cohen/Investing.com)   |  Jun 03, 2020 06:40
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • The V-shaped recovery narrative persists despite an ongoing pandemic, grim economic data and protests in the US
  • Despite risk-on, yields remian depressed, showing investor concerns linger
  • Gold falls because of its safe haven status

Key Events

US futures for the Dow Jones, S&P 500, NASDAQ and Russell 2000, and global stocks all extended an advance on Wednesday, fueled by increasing chatter of an immediate economic recovery and Tuesday's strong Wall Street performance. As well, Asian indices were all boosted by positive Chinese economic data as markets continue to disregarding a pandemic that keeps spreading as well as dire economic data and social unrest in the US.

Gold is trading lower and the dollar continues to slip. Oil is holding above $36.

Global Financial Affairs

Contracts on the major US indices opened higher this morning, on expectations of a V-shaped recovery despite a lack of progress on a medical solution for COVID-19 and the strong possibility of a second wave in countries that have ended lockdowns,such as Israel and Japan where new cases have spiked.

After S&P 500 futures yesterday broke to the topside of a symmetrical triangle on the four-hour chart, they just kept going.

SPX Futures 4-Hour Chart
SPX Futures 4-Hour Chart

This morning, however, after churning for the last four hours, and with indications from both the MACD and the RSI turning lower, it looks like the index is due for at least a pullback.

The pan-European STOXX 600 Index climbed, buoyed by automobile makers and insurance firms, reaching its highest level since March 6.

In Asia today, South Korea’s KOSPI outperformed, (+2.9%), reaching the highest since Feb. 21, lifted by a third round of fiscal stimulus from Seoul. China’s Shanghai Composite lagged, trading less than 0.1% in the green. After outperforming much of the time despite the brewing trade war with the US, the SSEC ironically underperformed when good economic data was released. Caixin Services PMI jumped to 55.0, into positive growth territory, buttressing the narrative that the worst is behind China, pushing global stocks higher.

Yesterday, during the New York session, US equities advanced for the third day, with wide participation. For every decliner, two stocks advanced, pushing Wall Street benchmarks to their highest since March 4.

Despite the rally, yields, including for the 10-year benchmark Treasury note, remain trapped within a presumably bearish pattern.

UST 10Y Daily
UST 10Y Daily

We use the term presumably because the formation isn't fully defined: it could be a symmetrical triangle after a decline or a H&S continuation pattern, after a decline. If investor sentiment were truly risk-on yields would have been sent much higher. The fact that 10-year yields are forming a shooting star at the top of the pattern demonstrates there's still continuous demand for the ultimate safe haven asset.

The dollar selloff extended for a sixth straight day.

DXY Daily
DXY Daily

This after completing a bearish triangle and falling below the 200 DMA, while obliterating an attempt for a rebound following a bullish hammer.

Gold is falling for the second day, despite the USD selloff. It's being pressured by its safe haven status, unlike yields.

Gold Daily
Gold Daily

It’s difficult to say whether the price of the yellow metal has already completed a falling flag (dotted line) or is continuing to develope a larger one. What's certain: trading is developing a symmetrical triangle (red lines), after completing a smaller one (green lines) and a H&S continuation pattern.

Oil is off the session’s high, above $37, at time of writing, but remains above $36 for a second day.

Oil Daily
Oil Daily

Technically, the top of the March 29 falling gap, at $41.28, is a presumed resistance.

Up Ahead

  • In Europe, on Thursday, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases. Anything less than an expansion would be a big shock, Bloomberg Economics said.
  • The much anticipated, monthly U.S. labor market report on Friday will probably show American unemployment soared to 19.5% in May, the highest since the 1930s.

Market Moves

Stocks

Currencies

  • The Dollar Index declined 0.2% or 1.7 for the past five days.
  • The euro gained 0.4% to $1.1215.
  • The British pound jumped 0.4% to $1.2603.
  • The Japanese yen was little changed at 108.66 per dollar.
  • The Indian rupee was little changed at 75.371 per dollar.

Bonds

  • The yield on 10-year Treasuries climbed two basis points to 0.70%.
  • Germany’s 10-year yield increased three basis points to -0.38%.
  • Britain’s 10-year yield climbed two basis points to 0.243%.

Commodities

  • Brent crude gained 1.8% to $40.27 a barrel.
  • Gold weakened 0.3% to $1,722.45 an ounce.
  • LME copper dipped 0.3% to $5,510 per metric ton.
  • Iron ore was little changed at $98.15 per metric ton.
Opening Bell: Futures, Global Stocks Extend Rally On V-Shaped Recovery Hopes
 

Related Articles

FactSet Research Systems Inc
Podcast : Financial Market Preview - Monday 6-Dec By FactSet Research Systems Inc - Dec 06, 2021

US futures are indicating a higher open as of 05:00 ET. European equity markets higher. Asian markets finished mostly weaker . Macro focus in Europe on a big drop in Eurozone...

Opening Bell: Futures, Global Stocks Extend Rally On V-Shaped Recovery Hopes

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email