Opening Bell: Stimulus, Recovery Hopes Boost Futures, Euro Stocks; Gold Up
Investing.com | May 28, 2020 05:52
- European shares jump for the fourth straight day
- Oil falls below $32, blowing a bullish pattern
- Gold, dollar jump h2 Key Events/h2
- Today brings the much anticipated, U.S. jobless claims reading for the week ended May 23.
- Federal Reserve Chairman Jerome Powell participates in a virtual discussion on Friday, sponsored by Princeton's Griswold Center.
- Euro-area data due Friday is forecast to show consumer inflation fell to 0.1% in May from 0.4% the previous month.
- Futures on the S&P 500 Index climbed 0.1%.
- The Stoxx Europe 600 Index gained 0.7%.
- The MSCI Asia Pacific Index rose 0.7%.
- The MSCI Emerging Markets Index dipped 0.1%.
- The Dollar Index increased 0.1%.
- The euro was little changed at $1.1002.
- The British pound was little changed at $1.2263.
- The onshore yuan strengthened 0.2% to 7.155 per dollar.
- The Japanese yen weakened 0.1% to 107.85 per dollar.
- The yield on 10-year Treasuries gained less than one basis point to 0.69%.
- The yield on two-year Treasuries dipped less than one basis point to 0.18%.
- Germany’s 10-year yield rose one basis point to -0.41%.
- Britain’s 10-year yield jumped one basis point to 0.205%.
- Japan’s 10-year yield fell less than one basis point to 0.0%.
- West Texas Intermediate crude declined 3.4% to $31.68 a barrel.
- Brent crude dipped 2.5% to $33.86 a barrel.
- Gold strengthened 0.7% to $1,720.74 an ounce.
US futures for the Dow Jones, S&P 500, NASDAQ and Russell 2000, as well as European stocks extended their rallies on Thursday, on additional European fiscal spending, while investors continued to ignore the diplomatic fallout between the world’s two largest economies over China's planned security law for Hong Kong.
The dollar rebounded with Treasurys, gold jumped, and the yen weakened.
h2 Global Financial Affairs/h2US contracts flipped between gains and losses this morning, on increased tensions between the US and China after the Asian nation's lawmakers approved a proposal for national security legislation in Hong Kong that's become a catalyst for renewed civil unrest in the semi-autonomous city. As well, this latest move by China could jeopardize Hong Kong's special trading status with the US and its position as a global financial hub.
NASDAQ futures dropped on the news that US President Donald Trump is about to sign an executive order to penalize big tech firms for the way they moderate content on their sites.
The STOXX Europe 600 advanced after the EU announced the details of its Recovery Fund, a 2.4 trillion euro package to ease the devastation of COVID-19 for Union nations.
From a technical perspective, the pan-European index didn’t just extend a rally for a fourth day, it also added a fourth, consecutive, higher open, bringing the benchmark to its highest level since March 6. The price retreated slightly from the session’s apex, finding resistance by yesterday’s high-wave candle, a pattern expressing trader bewilderment.
Stocks in Asia were mixed this morning, as investor sentiment wavered after a positive open since regional indices are more sensitive to any US-Sino spat and Hong Kong’s economy is seen to be particularly vulnerable, after last year’s economic hit from the 2019 riots. Plus, renewed violence would compound devastation wrought by COVID-19.
Hong Kong’s Hang Seng underperformed, (-0.72%), while Japan’s Nikkei soared, (+2.3%), the result of newly announced $1.1 trillion stimulus and a reopened economy.
Yesterday on Wall Street, the S&P 500 advanced to an 11-week high, closing above the 3,000 level and its 200 DMA.
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On the other hand, the trading pattern developed a hanging man, bearish with a confirmation of a close below yesterday’s real body—the price range between the open and close, disregarding intraday action. This follows Tuesday’s shooting star, also a bearish candle.
The dollar rebounded from the bottom of a range, supported by the 200 DMA. However, its next move remains unclear.
Gold rebounded for a second day.
The yellow metal moved off the key level shared by multiple patterns.
Oil gapped down below $32, blowing a potentially bullish flag, falling below the uptrend line since the April 28 low.
The ROC has already fallen below its uptrend line, and the less sensitive momentum-based RSI was curving around. The MACD was getting ready for a bearish cross too.
h2 Up Ahead/h2
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