Opening Bell: U.S. Futures, Stocks Jump On More Stimulus, Economic Restarts

  • Markets continue to disregard rising tensions between the US and China
  • Europe set to unveil 1 trillion euro recovery-package
  • Civil unrest returns to Hong Kong after Beijing security law proposal

Key Events

US contracts for the , , and , along with European equities extended a rally on Wednesday, as markets ignored simmering tensions between the world’s two largest economies and instead focused on the reopening of global economies and growing expectations of .

Yields declined as investors shifted into risk assets and slipped below $34 at the time of writing.

Global Financial Affairs

Futures for all four major US indices were in the green, this morning, each at least +0.7% higher and as much as 2.8% for the Russell 2000, though they were fluctuating, at the time of writing.

SPX Futures Daily

Contracts on the SPX struggled above the 200 DMA, for a second day. contracts stopped below the 100 DMA. NASDAQ futures jumped above the 100 DMA, after failing to do so yesterday.

The opened higher on elevated volume, to the highest level since March 9, as investors eyed the EU recovery plan. The European Commission proposal would recreate growth for Union nations, with grants, loans and guarantees of more than 1 trillion .

Asian indices were muted earlier today, as fresh political unrest in Hong Kong added to regional market headwinds, which could include a path to an outright cold war between China and the United States. The weakened to within 0.3% of its all-time low since September 2019, then the height of the Sino-US trade spat. Considering that accusations by Washington of Beijing’s currency manipulation is one of the core issues, this may serve to spread additional salt on the wound.

Hong Kong’s was a drag on regional benchmarks, (-0.6%), after police on anti-government protesters angered by additional security legislation proposed by China for the semi-autonomous city. Last year’s unrest hit the Asian financial hub’s economy hard; a repeat would exacerbate the economic damage left by the coronavirus.

Japan’s bucked the trend, (+0.7%), just a day after the world’s third-largest economy was restarted. The financial sector led the advance thanks to a short squeeze.

Yields, including for the US Treasury note, declined as more money was routed into stocks.

UST 10Y Daily

From a technical perspective, rates have been ascending within a band since the April 21 low and are now above the 50 DMA for a second day.

An ongoing equity rally generally weighs on safe havens, including the .


The USD/JPY is completing a possible small, H&S bottom. Note, the diminishing volume for the pair. A close above the neckline which would include climbing above the major MAs would provide a reason to be bullish.

is testing the neckline of an H&S continuation as well as the symmetrical triangle that followed and, finally, the falling flag.

Gold Daily

Gold Daily

Should this key level hold, the precious metal would be developing yet a fourth bullish pattern, a larger symmetrical triangle.

Oil slipped below $34, after being unable to conquer the $35 mark for a fifth session.

WTI Daily

Technically, the price of crude is depressed below the 100 DMA and losing momentum. It seems the real economy is catching up with the commodity’s price, after it soared from negative territory and well beyond, ahead of reopening economies. The price may develop a bullish pennant, but it would be prudent to wait for confirmation of an upside breakout before getting too excited.

There are too many fundamental triggers clouding the picture as to what will happen next, and, more importantly, when.

Up Ahead

  • Thursday brings the weekly U.S. reading for the week ended May 23. In the past two months close to 40 million Americans have filed claims.
  • Federal Reserve Chairman participates in a virtual discussion sponsored by Princeton’s Griswold Center on Friday.
  • Euro-area data published Friday is forecast to show fell to 0.1% on May from 0.4% the previous month.

Market Moves


  • Futures on the gained 0.7%.
  • The Stoxx Europe 600 Index increased 0.4%.
  • Germany’s advanced 0.9%.
  • The climbed 0.3%.


  • The increased 0.1%.
  • The euro declined 0.1% to $1.0968.
  • The Japanese yen was little changed at 107.52 per dollar.
  • The fell 0.2% to $1.2305.


  • The yield on 10-year Treasuries fell one basis point to 0.68%.
  • Germany’s yield dipped two basis points to -0.45%.
  • Britain’s yield declined two basis points to 0.192%.


  • West Texas Intermediate crude dipped 1.6% to $33.80 a barrel.
  • Gold weakened 0.1% to $1,708.77 an ounce.

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