U.S. Stocks Set To Open Higher As Traders Bet On Swift RecoveryS&P 500 futures are pointing to a higher open amid global market optimism.
The Stock Market Continues To Ignore Coronavirus Risks
S&P 500 futures are up more than 1% in premarket trading as traders bet on the continuation of economic recovery.
The were no good news on the coronavirus front over the weekend. According to data from Johns Hopkins University, the world has already registered more than 11.4 million coronavirus cases. The number of registered cases in the U.S. is close to 2.9 million.
Australia has decided to close borders between two states with the biggest population as it struggled to contain the second wave of the disease. India has recently surpassed Russia and entered the top-3 by the number of registered COVID-19 cases.
However, the stock market does not believe that any problems on the healthcare front will lead to new serious lockdowns. In this situation, traders are focused on economic reports which mostly come better than expected.
Analysts Expect Material Improvement In Composite PMI For June
Today, the U.S. is set to provide Services PMI and Composite PMI reports for June. Analysts expects major improvements as Services PMI is projected to grow from 37.5 to 46.7 while Composite PMI is set to increase from 37 to 46.8.
Given the recent market optimism, better-than-expected reports will likely provide an additional boost for stocks.
At the same time, the market is so focused on the economic recovery that disappointing reports may cause a temporary sell-off.
Gold And Oil Show That Some Fear Is Still Present In The Global Markets
While stocks are trading as if there is no pandemic at all, gold and oil show that the economy is not out of the woods yet.
Gold continues its attempts to get to the $1800 level. Gold is used as a hedge against potential market sell-off and continues to gain ground together with the stock market. This is a very bullish setup for gold mining stocks.
Meanwhile, WTI oil prices are struggling to develop upside momentum above $40 as traders fear that the increased number of coronavirus cases in the U.S. can lead to new virus containment measures and hurt oil demand in the midst of the driving season.
For a look at all of today’s economic events, check out our economic calendar.