The Market Is Ready To Rebound After Sell-Off
S&P 500 futures are gaining ground in the premarket trading session as investors prepare to pick up stocks that became much cheaper on Thursday.
Yesterday, S&P 500 lost almost 6% and Dow was down by roughly 7% as the Fed’s gloomy economic outlook and fears about the second wave of coronavirus led to a major sell-off.
Today, investors are once again in a good mood. While the virus fears have not evaporated, there is a consensus that the U.S. will not implement a second lockdown regardless of what is happening on the virus front. In addition, the healthcare system is now much better prepared to deal with an increase in COVID-19 patients.
The immediate rebound after the big sell-off highlights the underlying bullish trend in the market. Given the unprecedented monetary stimulus provided by the Fed, S&P 500 will likely need additional negative catalysts to drop below the 3000 level.
Gold Continues Its Upside Move
Gold looks ready to test the $1750 level, supported by dovish commentary from the Fed and increased demand from investors who want to hedge against an additional sell-off in the equity market.
The gold price upside shows that there’s still some nervousness in the air despite the major equity market rally from mid-March lows.
A move above $1750 will likely trigger another upside leg in gold stocks like Barrick Gold, Newmont Mining, Kinross Gold, Kirkland Lake Gold and others. Such an upside move may be material as gold will likely pick up momentum once it gets above $1750.
Export Prices And Import Prices Show Signs Of Upside On A Month-Over-Month Basis
The U.S. has just provided reports on Export Prices and Import Prices for May. Both Export Prices and Import Prices decreased by 6% year-over-year compared to analyst consensus which called for a decline of 6.8%.
On a month-over-month basis, Export Prices increased by 0.5% while Import Prices increased by 1%, suggesting that prices started to gain some strength after major weakness caused by lockdowns and fluctuations in the exchange rates.
For a look at all of today’s economic events, check out our economic calendar.