October 8, 2020

Stock Futures Set To Advance

Stock Futures Set To Advance

The rollercoaster ride continues for the U.S. stocks, and there is no shortage of volatility this month. The interesting element is that the volatility is likely to remain erratic throughout this month. This may not be unusual for the month of October, but this is not your usual October. 

This October is leading us into the U.S. presidential election. That means that traders and investors will need to learn to stay on their toes. If we have learned anything this month, it is this that every single headline is a game-changer. 

Yesterday, we saw another 500-point swing for the Dow Jones, and the U.S. stock futures are looking solid again today. It seems like that the U.S. stock market is ready to move all the obstacles out of its way, and the only path to move forward is upward. 

Standalone Stimulus Bill

Despite the fact that we are unlikely to see a full-blown fiscal support aid package from the U.S. lawmakers, traders are cheering the news that there could be some relief package for the U.S airlines, which are facing the most challenging time. 

The House Speaker, Nancy Pelosi, has also shown a lot more flexibility with respect to this. Pelosi has shown full willingness to work with the Treasury Secretary, Steven Mnuchin. Both could draft one standalone bill to ease off the pain for the U.S. airlines. 

Why Are Markets Moving Higher?

One of the key reasons we see the stock market continuing its upward momentum is that investors know that another stimulus package is almost a done deal. The only unknown factor is the size of the package, and the size does matter. 

Traders are also ignorant of one factor. The dead do not come back to life. It is essential to keep in mind that small to medium-sized businesses are struggling every day, and as we know that there will be no further help for another month, it increases the odds of their failure. So the question is, have we priced in this volatility? 

Struggle for the Tech Sector

The tech sector also scored a decent session yesterday, but again, looking at the FANGMAN stocks’ price action, it is pretty clear that these stocks are struggling to record any substantial gains. The tech sector no longer leads the stock rally, this time, it is the material sector. It is likely that we may continue to see this trend as the U.S. lawmakers continue to trend big-tech. 

The breakup of big-tech is a massive threat to tech stocks. 

Coronavirus Update 

The coronavirus situation isn’t improving as the global numbers have passed the 36.8 million mark, and the virus has caused over 1.06 deaths.

 President Trump triggered a massive rally for the Regeneron Pharmaceuticals overnight by saying that the experimental antibody was the key to recovery. 

Traders and investors are taking things a little out of context in thinking that the Regeneron antibody could be the final answer for the coronavirus. The stock is highly likely to see more volatility today.