The Dow Jones futures are trading higher as traders are optimistic about the Moderna vaccine trial data. It seems like that the nightmare the global economy is living may have a solution.
We have seen several events of similar optimism that led to stock market rallies this year. But the fact is that any news that confirms a possible defense against Covid-19 is positive for the coronavirus stock market.
President Trump signed an order yesterday that ends Hong Kong’s special status. The US-China relation is still something that investors need to keep an eye on.
The Dow Jones industrial average and S&P 500 futures are also going to pay close attention to the OPEC+ online meeting. The cartel will discuss the most critical issue regarding the oil supply.
OPEC+ reduced oil production during the pandemic’s peak to address the weak oil demand due to coronavirus. Today, the meeting is to discuss this issue, and the question for them is if they should keep the supply cut at its current level or begin the process of reducing those supply cuts. Later today, we also have the US crude inventory data, and that is likely to bring higher volatility for WTI and Brent oil prices.
The Dow futures are also gaining some lift due to a more optimistic tone from some of the Federal Reserve’s officials. For instance, St Louis chief, James Bullard, said that he is more confident about the US economic recovery during the second half of this year. He expected the US unemployment rate to be reduced significantly by the end of this year.
Gold prices are still holding on to their $1800 price level. The risk-on rally has taken some shine off the metal, but the fact that prices are still holding the $1,800 mark is positive.
It is likely that we may see the gold price fall below the $1,800 mark, but such an event could be an opportunity as we are still a long way away from reaching our goals—bring the global economy back to pre-coronavirus level.
The upcoming US industrial and Empire State manufacturing data are likely to be the focus among traders. A strong reading may trigger some more profit-taking by gold traders.
The global stock market recorded a positive day. The Japanese Nikkei index recorded most of the gains; it advanced 1.59%. The Shanghai index declined by 0.59% while the HSI index closed mostly flat.
Here is more on this:
Moderna Stock and Vaccine News
Moderna has been at the forefront of developing a coronavirus vaccine. Yesterday it came out with more positive news. A Covid-19 vaccine that was tested on 45 healthy adults confirmed a boost in their immune system.
This trial study of the coronavirus vaccine by Moderna now paves the path for a bigger trial of this vaccine on nearly 30,000 healthy individuals.
The final study trial is set to begin on July 27. The US chief scientist Dr. Anthony Fauci is enormously optimistic about the Moderna coronavirus vaccine news, and he has said, “No matter how you slice this, this is good news”.
Moderna’s stock price is likely to be highly volatile and in demand today.
Dow Index and S&P500 Index: Market Breadth
The stock market’s breadth shows that bulls have gained more momentum. 47% of the Dow Jones stocks have traded above their 200-day moving average.
The S&P 500 stocks continue to show more bullish support for the coronavirus stock market rally. 45% of the shares are trading above their 200-day moving average.
Dow Jones and S&P 500 Futures Today
The Dow Jones futures are trading higher by 200 points. The old trick in the book is back: traders are pushing the coronavirus stock market rally due to more positive news on Coronavirus news.
The Dow Jones futures crossed and closed above the 200-day simple moving average on a daily time frame yesterday. The DJ30 index price is now back above all the three critical averages: 50, 100, and 200-day SMAs.
Traders and investors are likely to buy stocks because of this Dow signal. Overall, this confirms that the Dow Jones future index could be on the verge of a major bull run.
The S&P 500 index, a better representative of the US stock market, maintains its upward trend. This is because we have already formed a higher high as compared to the last week.
The S&P 500’s price shows that the bulls are in control of the price because the price is above the 50, 100, and 200-day SMAs. As long as the price stays above these averages, the S&P 500 futures are likely to continue their bull run.
Stock Market Rally
The S&P500 index tore all the resistance levels in its way yesterday and closed higher by 1.34%. All the 12 sectors of the S&P 500 closed in positive territory. The energy and material sectors led the gain for the S&P 500 stocks and recorded gains of 3.60% and 2.54%, respectively.
The Dow Jones index soared over 500 points yesterday and closed higher by 2.13%. All the 30 stocks of the Dow index recorded gains. United Health and Caterpillar led the gains for the DJ30 index.
The NASDAQ composite, a tech-savvy index, also advanced 0.82% yesterday.
Coronavirus: Florida Experienced Record Covid-19 Deaths
Coronavirus global tracker confirms 573K deaths due to Covid-19, and global coronavirus cases continue to rise.
Florida reported a record number of Covid-19 deaths yesterday. However, the surge in new coronavirus cases in Florida has slowed. On Tuesday, Florida reported 291629 new Covid-19 cases, which was a surge of 3.3% from a day earlier but much lower than the seven-day average, which is at 4.6%.
Trump News: Hong Kong No Longer Has A Special Status
Trump has signed an order yesterday that takes away the special treatment Hong Kong was receiving. This particular act of Donald Trump is designed to punish China for imposing a new security law in Hong Kong.
Once again, it is essential to keep in mind that China considers these acts as interfering in domestic issues. It is almost inevitable that we will not see a counter-reaction from Beijing.