2020-03-10 • Updated
The performance of the US stock market has been quite dramatic this week. S&P 500 dropped by 7% four minutes after the US trading session started on Monday. Then trading resumed, but the index stayed in the negative territory. Stocks fell on the growing fear of the economic impact of the coronavirus and the price that broke out in the oil market.
Tuesday brought some support for S&P 500 as President Donald Trump said that he will seek a payroll tax cut and “very substantial relief” for industries that have been hit by the virus. Apparently, the virus got closer to the President: he has been in contact with two Congressmen who are now in self-quarantine.
Trump said that he would provide details of his anti-coronavirus plan at a press conference on Tuesday. If he announces big steps, S&P 500 will cheer and get higher.
Correction to the upside is a natural case after a big decline.
According to a research done by Bespoke Investment Group, S&P 500 has fallen by 10% or more on 10 other Mondays since 1952. Interestingly, it has gained more than 2.2% the next trading day in all of the 10 cases. In addition, on average, the index has returned 12.75% in the six months after the slump.
Of course, the previous history offers no guarantees for the future price action. Still the combination of this observation together with Trump speech has a chance of producing positive market dynamics.
S&P futures price is testing levels above February low at 2,853.25. Resistance lies at 2,975 (resistance line of the short-term downtrend, 50-period MA on the H4). Support is at the previous low of 2,695.
More and more analysts are sure Brent oil will surpass $100 a barrel. So how heavily will oil move the markets, and what will the direction of the movement be? Let's find out!
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Institutional investors speak about further growth in the stock market. In the exact market that has doubled since COVID-19 and doesn’t plan to stop. Is it possible?
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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