Opening Bell: Stimulus, Recovery Hopes Boost Futures, Euro Stocks; Gold Up

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  • European shares jump for the fourth straight day
  • Oil falls below $32, blowing a bullish pattern
  • Gold, dollar jump

Key Events

US futures for the , , and , as well as European stocks extended their rallies on Thursday, on additional European fiscal spending, while investors continued to ignore the 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.

Global Financial Affairs

US 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 advanced after the EU announced the details of its , a 2.4 trillion package to ease the devastation of COVID-19 for Union nations.

STOXX 600 Daily

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 underperformed, (-0.72%), while Japan’s soared, (+2.3%), the result of newly announced $1.1 trillion stimulus and a reopened economy.

Yesterday on Wall Street, the advanced to an 11-week high, closing above the 3,000 level and its 200 DMA.

SPX Daily

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.

DXY Daily

The rebounded from the bottom of a range, supported by the 200 DMA. However, its remains unclear.

rebounded for a second day.

Gold Daily

Gold Daily

The yellow metal moved off the shared by multiple patterns.

gapped down below $32, blowing a potentially bullish flag, falling below the uptrend line since the April 28 low.

Oil Daily

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.

Up Ahead

  • Today brings the much anticipated, U.S. reading for the week ended May 23.
  • Federal Reserve Chairman participates in a virtual discussion on Friday, sponsored by Princeton’s Griswold Center.
  • Euro-area data due Friday is forecast to show fell to 0.1% in May from 0.4% the previous month.

Market Moves

Stocks

  • Futures on the S&P 500 Index climbed 0.1%.
  • The Stoxx Europe 600 Index gained 0.7%.
  • The rose 0.7%.
  • The dipped 0.1%.

Currencies

  • The Dollar Index increased 0.1%.
  • The euro was little changed at $1.1002.
  • The was little changed at $1.2263.
  • The strengthened 0.2% to 7.155 per dollar.
  • The weakened 0.1% to 107.85 per dollar.

Bonds

  • The yield on Treasuries gained less than one basis point to 0.69%.
  • The yield on Treasuries dipped less than one basis point to 0.18%.
  • Germany’s yield rose one basis point to -0.41%.
  • Britain’s yield jumped one basis point to 0.205%.
  • Japan’s yield fell less than one basis point to 0.0%.

Commodities

  • West Texas Intermediate crude declined 3.4% to $31.68 a barrel.
  • dipped 2.5% to $33.86 a barrel.
  • Gold strengthened 0.7% to $1,720.74 an ounce.





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