U.S. Stocks Set To Open Higher As Oil Prices Stabilize

A Pause In Oil Price Downside Helps Stocks Gain More Ground

S&P 500 futures are gaining more than 1% in premarket trading as oil prices have finally stopped falling like a rock. Both WTI and Brent oil had volatile trading sessions, swinging between gains and losses, but are mostly flat compared to the close of the previous session.

Interestingly, the market has shown its ability to support oil-related equities in recent days, and major oil producers like Exxon Mobil and Chevron or services firms like Schlumberger and Halliburton had decent performance compared to what could have happened on these dark days for the oil market.

It remains to be seen whether this trend will continue in the long run, but the stock market’s readiness to support oil equities at times of unprecedented downside in the oil market may signal that they are ready for a short-term upside move.

More Help For Small Businesses

The damage dealt by virus containment measures is enormous so it’s not surprising to see the expansion of aid programs. This time, the U.S. will provide almost half a trillion dollars to help small businesses, hospitals and impove coronavirus testing.

At this point, U.S. has no funding problems as demand for U.S. Treasuries stays very healthy and their yields continue to fall. The same can be said about the U.S. dollar, although it has corrected a bit following a few days of upside.

Netflix Misses Earnings Estimates And Predicts Slower Growth In The Second Half Of The Year

Netflix reported GAAP earnings of $1.57 per share compared to analyst estimates of $1.64 per share. The company added almost 16 million new subscribers which was higher than expected.

However, the company stated that the second half of the year may be more challenging as many potential customers might have already signed up to the service, pushed by orders to stay at home.

As I wrote earlier, the market expectations for Netflix were high, and it will be interesting to see whether the stock can hold at current levels after the earnings report. Currently, Netflix is down about 2% in premarket trading. Netflix’ reaction to the earnings report may set the tone for the trading in other big tech shares during this earnings season.