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Vladimir Zernov
U.S. Stock Market

On Second Thought, Markets Embrace Unlimited QE

The U.S. stocks were down yesterday despite the Fed’s promise to pump as much money into the financial system as will be deemed necessary. However, the market is making a U-turn today, and S&P 500 futures point to a higher open due to expectations of monetary stimulus.

S&P 500 futures even hit the 5% upside limit at one point, highlighting the nervous nature of today’s markets which are ready to move up and down on the same catalyst.

Adding to optimism, U.S. President Donald Trump hinted that he will seriously consider lifting coronavirus-related restrictions in the near term as the U.S. “wasn’t built to be shut down”.

Many asset classes are in rally mode due to a combination of Fed’s unlimited quantitative easing and hopes that the lockdown could soon end. Gold has the most notable rally as it has almost breached the $1700 level. Just several days ago, gold traded near $1450 per ounce.

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WHO States That U.S. Has The Potential To Become A Coronavirus Epicentre

Meanwhile, the World Health Organization is not that optimistic as the U.S. markets. WHO stated that the U.S. had a very large outbreak that was increasing in intensity.

The new numbers have not been released yet, but the U.S. already has more than 46,000 cases according to data from Johns Hopkins University. Fresh data from Spain indicated that the number of coronavirus cases has jumpted from 33,089 cases on Monday to 39,673 cases on Tuesday, and it’s hard to believe that the U.S. will have a smaller increase given the pace of contagion in recent days.

In this light, it remains to be seen whether actual medical data will allow the U.S. President Donald Trump to reopen businesses in the near future even if the economic damage is huge.

Gold Miners In Spotlight

The recent major upside move in gold will lead to investor interest in gold miners. It’s important to note that gold miners operate in a real world, and many of them are facing shutdowns due to coronavirus containment measures in various parts of the world.

However, some interest in bigger, diversified players like Barrick Gold, Newmont Mining, Agnico Eagle Mines, AngloGold Ashanti, Kinross Gold is almost guaranteed.

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