Trade Stock Futures With Caution

Trade Stock Futures With Caution

European and US stock futures are heading for a cautious open despite some decent gains on Wall Street yesterday. Inflation is still a major concern among investors and traders while they are also keeping a close eye on cryptocurrencies. If we look at the volatility index, it appears that traders are still favouring its price action as they are not fully sure about the risk-on trade.

The Dow Jones Industrial Average, S&P 500, and Nasdaq all rose yesterday as Big Tech regained its footing. Apple, Microsoft, and Intel drove the Dow up nearly 200 points.

Stock Market Today

The S&P 500, the NASDAQ composite, and the Dow increased by 1.1%, 1.4%, and 0.5% respectively. The Russell 2000 index, constituting small cap stocks, also increased by 0.7%. NASDAQ and NYSE traded at lower volumes on Monday, compared to those on Friday.

Nasdaq reached its 50-day moving average thanks to the rally in Big Tech. On May 10, the index fell by 2.6%, falling below the line for the first time since March.

Dow Jones Today

Many Big Tech stocks in the Dow index rose by more than 1.5%. Microsoft (MSFT), Salesforce.com (CRM), Systems (CSCO), and Intel (INTC) were among the best performers. Apple (AAPL) increased by 1.3% and closed just below the 10 week moving average.

Microsoft, JP Morgan, Goldman Sachs, Amgen, and UnitedHealth Group

Microsoft reclaimed its 50-day line with a gain of 2.4%. From a flat base buy point of 246.23, putting it back in the prospective purchase range. The buy zone rose to 258.54 points.

Goldman Sachs (GS) and JPMorgan (JPM) are two other blue chips in the buy range. Goldman Sachs is still in the buy range from a 356.95 entry, up 0.6%. At 374.80, the buy zone peaks. JPMorgan stays in the 5% buy zone after rising 0.5% from a flat base of 161.79 points. The price range for buying goes up to 169.88.

However, UnitedHealth Group (UNH) lost 0.2% and is now comfortably extended from a flat base buy price of 368.05. Amgen (AMGN) plummeted 1.3%, breaking below its 50-day line. After a failed breakout, it’s back below a 256.70 buy point for a cup with handle.

NVDIA extends rally

Nvdia announced a four-for-one stock split on Friday. As a result, its stock rose by as much as 7% on Monday. If shareholders approve the split on June 3, there will be 4 billion registered shares of the company’s common stock.

Bitcoins’ Rise In Prices

Bitcoin prices are trying to stabilise today as Elon Musk seems to be favouring Bitcoin again. His tweet about having a conversation with North American Bitcoin miners is  clear evidence that the billionaire hasn’t turned away from Bitcoin all together. He has explicitly said that he likes Bitcoin, and his tone about Bitcoin seems to be positive. One thing that is very important when it comes to cryptocurrencies is that Bitcoin is considered as the religion, and without Bitcoin, the whole space could die.

Federal Reserve Governor, Lael Brainard, promoted the idea of a digital currency backed by the Federal Reserve. She listed simplified cross-border transactions and fraud protection as benefits of embracing blockchain. Bitcoin values have risen dramatically in the last year, indicating the potential market of such a currency.

On Monday, Bitcoin was on the rise. It was trading around $37,500, up nearly 16% from the same time Sunday. Grayscale Bitcoin Trust (GBTC) is currently trading near the 200-day moving average and has gained nearly 5%. GBTC’s stock dropped nearly 24% last week.

Asian Stock Markets

Asian Pacific markets have also been surging today. The Nikkei 225 in Tokyo increased by 0.6%, and the Shanghai Composite Index increased by nearly 1.54%. Hong Kong’s Hang Seng index increased by 1.19%. The Seoul Kospi increased by 0.70% while Australia’s ASX 200 advanced 0.65%.

Coronavirus Update

The United States has been successful in controlling the outbreak of cases due to an effective vaccination programme. According to the CDC, as of Tuesday, approximately 39.3% of Americans had been fully vaccinated, with 49.4% having received at least one dose. Since January, the number of new cases reported per day has decreased by nearly 89%, with 19,866 new cases and 325 new deaths reported on May 24.