July 16, 2020

Special Report: ECB, US Jobless Claims And China

Special Report: ECB, US Jobless Claims And China

The Dow Jones futures are trading modestly lower as traders want to practice patience before the European Central Bank’s monetary policy meeting and the US retail sales data. There is no doubt that the coronavirus vaccine data news from Moderna caused traders to buy stocks yesterday. But the fact is that the coronavirus situation in Florida and Texas is continuously worsening, and this is keeping the Dow Jones futures in check.

The Trump administration wants the Covid-19 data to be sent directly to them. They want to bypass the Centers for Disease Control; some experts have their concerns about transparency. 

Twitter hacking of high-profile names such as Kim Kardashian and Elon Mush has given a bad name to Bitcoin once again, and Twitter’s stock is likely to face backlash. 

Here is more on this: 

The ECB Meeting, Euro, European Stocks And Dow 

The Dow Jones industrial average and S&P 500 futures are paying close attention to the European Central Bank’s monetary policy decision. This is likely to bring some wild moves for the Euro currency against the dollar and European indices. 

The expectations are that the bank will keep its monetary policy unchanged. Previously, the ECB increased its Pandemic Emergency Purchase Program by 600 billion euros and also extended the duration until June 2021. The measure saved the Eurozone from a significant contraction, and the economic data supports this argument. Of course, the firm control over the coronavirus pandemic has also played its part in this economic recovery. 

The ECB is likely to be pleased with its current measures, but it may highlight the worsening pandemic situation abroad. Traders are hopeful that their cautious approach, but the optimistic tone will spur a rally in the Euro and European stocks. 

DJIA Index and US Unemployment Claims 

The DJIA futures are likely to get more tailwind if the US weekly jobless claims data shows more improvement in the US jobs market. The weekly unemployment claims are expected to drop to 1.25 million against the previous reading of 1.314 million. But skeptics will still drum the same beat—the US still has over 1.25 million unemployment claims. 

China Reported Outstanding GDP Data 

China has confirmed that it has what it takes to fight the woes of coronavirus. The country’s GDP data surprised speculators and disbelievers. The Chinese GDP number came in at 3.2% against the previous reading of -6.8%, while the forecast was 3.2%. This is a stellar performance for the Chinese GDP and a remarkable comeback. 

However, it is the path from here onwards that is likely to be more arduous as the tensions continue to rise between the US and China—the two biggest economies in the world. The re-opening of the global economy should continue to provide a tailwind for the Chinese economy. 

Gold Prices, US Retail Sales Data and Stimulus Check 

Gold prices are in a consolidating zone, and traders need a new catalyst that could push the precious metal’s price out of this zone. There is nothing more important in terms of this catalyst than the upcoming US retail sales data. The anticipation is that the US retail sales growth is likely to slow down dramatically after a stellar performance in June. The obstacles in the path of re-opening the US economy may have kept the consumers from spending. 

Also, there is enormous uncertainty about the US jobs protection program that is going to run out this month. There is no clarity regarding what Congress will decide in terms of a new stimulus package. Americans are not sure if there will be any protection like before in terms of stimulus checks. 

Nonetheless, the forecast for today’s US retail sales data is 5%, and the last month’s reading was 12.4%. Anything better than the estimates may help the US dollar and the stock markets. 

Twitter Hack: Elon Musk, Joe Biden, Apple, Kim Kardashian 

Twitter stock is likely to face the heat today after it suffered a massive hack yesterday. Twitter accounts of high-profile individuals were hacked simultaneously to spread the cryptocurrency scam yesterday. Barack Obama, Joe Biden, Elon Musk, Bill Gates are just a few of the names whose accounts were hacked. 

The hack promoted a Bitcoin address with a claim that any amount of payment that is sent would be doubled and sent back. These kinds of hacks and scams are known in the cryptocurrency world, and they only tarnish the Bitcoin’s reputation. 

All top cryptocurrencies are down today. Bitcoin has been struggling for some time; this event has made this struggle worse.

Dow Index And S&P500 Index: Market Breadth

The stock market’s breadth shows continuous improvement in bull momentum. 49% of the S&P 500 stocks have traded above their 200-day moving average, a 4% change from the day before. 

The DJ30 stocks continue to show more bullish support for the coronavirus stock market rally. 83% of the shares are trading above their 50-day moving average. 

Dow Jones And S&P 500 Futures Today

The Dow Jones futures are trading lower by 100 points. Traders are taking some profit off the table ahead of economic-data heavy day.

The Dow Jones futures price remained above the 200-day simple moving average on a daily time frame yesterday. As long as the DJ30 index price is above the 50, 100 and 200-day SMA, the bull rally is likely to continue. 

The S&P 500 index, a better representation of the US stock market, is also trading above all the critical moving averages such as the 50, 100 and 200-day SMA. The S&P 500 price action on the weekly chart also looks bullish, and this confirms that traders are likely to continue to buy stocks. 

Stock Market Rally 

 

The S&P500 index is only a few points away before it erases its year-to-date losses. As of yesterday, it was down only 0.13% YTD. The S&P 500 stocks pushed the index higher by 0.91% yesterday. Apart from the utility sector, the rest of the 11 sectors closed in positive territory. 

The Dow Jones index gained 227 points yesterday and closed higher by 0.85%. 25 shares advanced, and 5 fell. Boeing jumped the most yesterday, and UnitedHealth was the biggest drag. 

The NASDAQ composite, a tech-savvy index, also advanced 0.11% yesterday. 

 

 

Coronavirus: California Reports Record Covid-19 Deaths 

California shattered records yesterday. It reported the highest number of coronavirus cases, over 11K cases were reported in California. The hospitalization rate due to Covid-19 also went through the roof. Sadly, California also reported record deaths. 

NASCAR Hosts Largest Crowd 

For some more encouraging news, NASCAR hosted the largest crowd among any other sporting event since the coronavirus pandemic started. 30,000 NASCAR fans were allowed. Although the official attendance figures weren’t released, it is expected that there were nearly 10,000 NASCAR fans. 

This shows some signs of normality, and it also signals that large crowd gathering may begin once again. 

Trump Administration Wants Covid-19 Data, CDC Bypassed 

The Trump administration raised alarms among many experts when it said that it needs the data directly. Hospitals are ordered to send the Covid-19 data directly to the Trump administration and not to the Centers for Disease Control. The Trump administration has used the excuse that it wants to “streamline the process”, but there is fear that the transparency of the data will be lost.