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Vladimir Zernov
U.S. Stock Market

U.S. Reports More Than 60,000 New COVID-19 Cases For Second Day In A Row

On Thursday, the U.S. reported another record daily increase in the number of coronavirus cases. The pandemic shows no sign of slowdown and starts to put pressure on stocks which continue to trade on high levels.

Most market observers do not expect that the U.S. will implement a second full lockdown as the economy will not be able to take a second hit of this size. Still, the rising number of infected will inevitably put pressure on economic activity as consumers will stay worried about their financial position and health.

Previously, the market has mostly ignored the bad news on the coronavirus front as traders bet that monetary stimulus will continue to provide support for asset prices.

Today, S&P 500 futures are losing some ground in the premarket trading session but it remains to be seen whether stocks will finish the day in the red zone as many traders are focused on buying any pullbacks.

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U.S. – China Relations Continue To Deteriorate

The U.S. has sanctioned high-ranked Chinese officials due to alleged human rights abuses against Uighur minority in China.

China has already stated that it will introduce counter-measures against the U.S. China did not provide any details about such measures.

U.S. – China relations are in a clear downtrend which may pose risks for the world economic recovery if countries start to implement more serious measures against each other. For now, the announced sanctions will have no impact on global trade.

WTI Oil Dips Below The $40 Level

Yesterday, I wrote that trading in a tight range was not typical for a volatile commodity like oil. Apparently, some traders lost patience waiting for an upside breakout, and oil declined below the important $40 level.

At this point, oil did not develop significant downside momentum. Currently, it trades near the $39 level. If the downtrend accelerates, oil-related stocks will decline to lower levels, putting additional pressure on S&P 500.

The next few trading sessions will show whether oil has sufficient support below $40. Without such support, oil may soon find itself closer to the 50 EMA at $36.

For a look at all of today’s economic events, check out our economic calendar.

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