U.S. Stocks Set To Open Higher As Investors Hope That The Upside Trend Will ContinueWith no material economic data to digest, investors continue to scoop up U.S. equities.
The Absence Of Economic Data Helps The Market Gain More Ground
S&P 500 futures are gaining about 1% in premarket trading as investors hope that the situation with coronavirus is stabilizing.
Importantly, the first half of this week was light on the economic data side, so the market has not been tested by negative news.
This situation will change tomorrow as the U.S. Initial Jobless Claims data will be released. The previous release indicated that 6.6 million of Americans applied for unemployment benefits, while the analyst consensus for this week’s released calls for 5.25 million Initial Jobless Claims.
Previously, the market was able to shrug off the negative employment data, but it will be more difficult to do this time since the market is at higher levels.
Oil Stocks May Experience Big Moves Ahead Of OPEC+ Meeting
Oil price dynamics could play a role in today’s trading since an ultra-important meeting of OPEC+ countries is scheduled for April 9, and traders may start placing their speculative bets today.
If any big moves in oil occur, oil stocks will surely follow, impacting general market dynamics.
As usual, the major oil producers like Exxon Mobil or Chevron are in spotlight. So far, their shares have shown better dynamics than oil prices during the current crisis, but it remains to be seen whether they will be able to withstand another leg down in oil if it happens.
Europe Fails To Reach Consensus On Economic Aid Plan
EU finance ministers have spent all night on negotiations about European support for the struggling economies. Discussions were put on hold until Thursday.
Hard-hit Italy and Spain argue that European “coronabonds” should be issued, while countries like Germany and Netherlands are against mutualization of debt.
The global economy is very connected nowadays, so a coordinated action from all major countries is necessary to reduce the damage from virus containment measures.
So far, governments and central banks provided the markets with sufficient liqudity, but even the unprecedented measures won’t be sufficient enough to support the world economy after the acute phase of the crisis.
At this point, the equity markets are optimistic that appropriate solutions will be found, and the companies will get enough support to get through virus-induced crisis.
If this confidence evaporates, we’ll see another leg down in U.S. equities.