S&P 500 futures are up this morning, but entering choppy waters. The primary BULL driver is the Federal Reserve. Speaking of which the Treasury Secretary Steven Mnuchin will testify Monday before the Senate Finance Committee about the US government’s efforts to combat the coronavirus. Open-Market Committee Vice Chair John Williams scheduled to speak this week as investors await updates on the economic outlook. The Federal Reserve has been buying bonds as part of its emergency lending program set up in response to the pandemic. The Fed released its first round of $1.2 trillion in bond purchases on Wednesday.
The primary BEAR driver is the coronavirus. Daily coronavirus cases fell for the second day in a row on Sunday but remained above the 40,000 mark for the third straight day. Twelve states, including Arizona, Florida, and Texas, have halted plans to reopen local economies if the recent rise in coronavirus infections is reversed. The Chinese company says its vaccine candidate has promised in human trials: China’s National Biotec Group (CNBG) said Sunday that its first clinical trial of a vaccine against the deadly virus indicated it could be safe and effective. In contrast, its second vaccine candidates showed encouraging results in clinical trials.
Southern states reported a record increase in coronavirus cases: Southern states reported an increase in coronavirus cases on Sunday, setting a global record. In contrast, the United States recorded the most cases within 24 hours, according to the Centers for Disease Control and Prevention (CDC). The southern state reported a record rise in coronavirus cases with more than 1,000 new cases last week, compared with about 500 on Saturday.
Market Bottomline – BULLISH
From a high level of macro-level, we are BULLISH because of the Fed’s involvement. We are capitalists and could argue classical economic theory all day, but the Federal Reserve is opening driving markets. Could it change? Maybe, but not likely before the election.
S&P 500 Pivot Points
| Pivot | Classic | Fibonacci | Camarilla | Woodie | DM |
|---|---|---|---|---|---|
| S3 | 2355.81 | 2657.84 | 2961.25 | 2585.74 | — |
| S2 | 2657.84 | 2773.22 | 2988.94 | 2676.19 | — |
| S1 | 2851.08 | 2844.50 | 3016.62 | 2887.77 | 2905.48 |
| P | 2959.87 | 2959.87 | 2959.87 | 2978.22 | 2987.07 |
| R1 | 3153.11 | 3075.25 | 3072.00 | 3189.80 | 3207.51 |
| R2 | 3261.90 | 3146.53 | 3099.68 | 3280.25 | — |
| R3 | 3563.93 | 3261.90 | 3127.37 | 3491.83 | — |
Other Market Factors
Trade War 2.0: The US-China feud is getting nastier: the US and China have moved beyond bellicose trade threats and exchanged regulatory buzzwords that threaten a variety of industries, including technology, energy, and air travel. Chinese security firms, the US, have pressured Europe to dismantle them and put their technology companies in the crosshairs as state-controlled companies that quietly dominate the European freight and airport market.
European Banks: The European Central Bank’s bond purchases are necessary. The benefits far outweigh the side effects, the head of the central bank’s monetary policy committee says in a new report, dismissing a lawsuit. German members of the ECB Executive Board are fighting a lawsuit in the US District Court for the District of Columbia in New York.
Coronavirus Globally: The global case exceeds $10 million, according to US record, and is the first of its kind in the United States and one of the largest in Europe. According to data from the National Bureau of Economic Research (NBIR), Chinese industrial firms “profits rose in May for the first time in six months, suggesting that the country’s economic recovery is gathering momentum and that prospects for investment and manufacturing jobs are brightening. Profits at the Chinese industrial company rose in May to their highest level in more than a year and rose again for the first time in six weeks, a sign of a strong recovery in the world’s second-largest economy.
The EU has warned China that investment talks are entering a critical phase, WSJ: Brussels warned that Beijing would limit Chinese investment in Europe if conditions of competition were not leveled. Brussels said progress by the end of July would reveal Beijing’s intentions but warned it would “take steps” to limit them.
Minister Alex Azar called on Americans to practice “social detachment” and wear masks in places where it is challenging to avoid close contact, saying Sunday that windows should be closed to stop the spread of the coronavirus. Russian President Vladimir Putin’s decision to close windows in the Russian capital Moscow to “stop the spread of coronaviruses.” Russian Prime Minister Dmitry Medvedev said Moscow had closed the window for the first time in Russia’s history to stop the “spread of a coronation.”
Masks could help stop the coronavirus, but why is it still controversial? California has closed bars in seven counties as the number of cases of the virus rises, according to the California Department of Health. Seven counties, including Los Angeles, and eight others, including Sacramento and Santa Barbara, had to close their bars because of rising patient numbers, Governor Gavin Newsom ordered Sunday. California is closing bars for the first time in more than a decade after the number of hospitalizations and deaths from the rising number of coronavirus cases rose.
As the country begins to reopen its economy, face masks, a valuable tool to slow the coronavirus’s spread, is struggling to gain acceptance in the West.
Possible Boening Boost? Flight tests of the Boeing 737 MAX are scheduled to begin Monday, people familiar with the matter told Reuters news agency. Flight tests for Boeing’s 737-MAX, the world’s most advanced passenger aircraft, begin Monday and last until the end of June.
New data show how deadly COVID-19 is for older people, according to a new study from the University of California, San Diego School of Public Health (UCSD). The study, which is part of its first to be associated with Covid-19 in Europe, involves people over 75 and identifies the region’s oldest citizens as a health policy for autumn and winter.
