Opening Bell: Futures, Global Stocks Drop On New Vaccine Delays; Oil Rebounds

Opening Bell: Futures, Global Stocks Drop On New Vaccine Delays; Oil Rebounds

Investing.com  | Oct 13, 2020 12:30

  • J&J's coronavirus vaccine study halted due to unexplained illness
  • NASDAQ notched best day since April on Monday
  • US banks start reporting results today, kicking off Q3 earnings season

Key Events

Johnson & Johnson's (NYSE:JNJ) announcement yesterday that it was pausing its trial on a COVID-19 vaccine sent US futures, including for the Dow, S&P, and Russell 2000, as well as European shares into the red on Tuesday. However, NASDAQ futures bucked the trend ahead of Apple's expected announcement of a 5G enabled iPhone after the US markets open later today.

The dollar jumped with yields, weighing on gold. Oil recovered but is caught in the crossfire of conflicting themes.

Global Financial Affairs

Contracts on the S&P 500 fell 0.5%, at the time of writing, after the news from JNJ that its trial has been halted because of an unexplained illness in a participant. However, traders may take the view that such speed bumps are par for the course as vaccine trials progress after last month’s similar hiatus by AstraZeneca (NYSE:AZN), which proved temporary.

Stimulus in the US is looking less likely once again after members of the House were told not to expect action this week as the confirmation hearings for the next Supreme Court judge started on Monday. As well, many Senate Republicans had already rejected the newest proposal from President Trump, indicating the plan was exorbitantly costly.

To that effect, the European Stoxx 600 Index, which slumped with coronavirus-sensitive industries including travel and leisure, cut early losses from 0.6% to 0.1%. From a technical perspective, regional stocks are struggling between two trends.

Stoxx Daily

The pan-European benchmark paused in its uptrend from the Sept. 25 low for the first time in four days, having found resistance at the top of a potential reversal pattern. The 50 DMA crossed above the 200 DMA, triggering a Golden Cross, among the most well known technical signals, demonstrating the conflict between the uptrend since the Sept. 25 low and the downtrend since the July 21 peak.

Japan's Nikkei managed to eke out a gain on Tuesday but Hong Kong's Hang Seng and South Korea's KOSPI were down on news of escalating COVID-19 cases and off-again/on-again stimulus concerns. This was despite data from China which showed that the world's second largest economy expanded 9.9% YoY to $249.8 billion. A 13.2% increase in imports helped to push the trade balance down in September.

Today’s customs data revealed that though exports overall were lower than forecast, they climbed 20.5%, to the US, to $44 billion even with higher US tariffs, but also American goods imported rose 24.5% to $13.2 billion.

However, among regional indices it was Australia's ASX that outperformed, up 1% and hitting a two-month high driven by banks and tech, as local traders placed their faith in the any future US stimulus.

Shares in the US extended an advance on Monday, nearing their highest levels in six weeks. The S&P 500 Index climbed for the fourth straight day, and the NASDAQ registered the biggest jump since April, adding as much as 4.1% but retreating a little to close up 3.09%. Technicals suggest that the tech-heavy index will take on its all-time high shortly.

NDX Daily

The NASDAQ flipped a H&S top into a smaller H&S bottom.

Amazon (NASDAQ:AMZN) shares surged, on expectations of huge sales numbers during its Prime Day event which starts today and runs for two days.

Apple (NASDAQ:AAPL), which is set to announce the addition of 5G to its new iPhone on Tuesday, saw its share price target increased by RBC Capital Markets to $390 from $345. Twitter (NYSE:TWTR) rallied when Deutsche Bank (NYSE:DB) increased its price target on the stock from $36 to $56.

Yields, including for the 10-year Treasury note, dropped to 0.75, but remained above the 200 DMA, which has been a proven support for the fourth straight day.

10-year Treasuries Daily

Meanwhile, the 50 DMA, which has been supporting rates since they crossed it on Aug. 12, is climbing toward the 200 DMA, for a potential Golden Cross.

The dollar seemed to find its footing after a four-day selloff.

Dollar Daily

Still, the greenback found resistance at the 50 DMA, after having fallen below the neckline of a would-be bottom. This increases the chances of a resumption of its underlying medium-term downtrend, framed within a falling channel.

Gold was flat, after having rebounded from a 0.7% drop. Perhaps it found support at the bottom of a possible falling wedge, bullish after the medium and long-term uptrend, made particularly so because of the 14% surge within 15 sessions preceding the bullish pattern.

Gold Futures Daily

On the other hand, demand has to prove it can absorb all the potential supply represented by the possibly-developing rising flag and preceding bearish symmetrical triangle.

Oil rallied from a slump when workers in the US Gulf headed back to work following Hurricane Delta’s landfall and Libya reopened its biggest field, as China’s crude imports rebounded, ending back-to-back MoM declines.

Oil Daily

The price of the commodity is trapped within a range, with a bias to a downsized breakout following a bullish rising wedge.

Up Ahead

  • Citigroup (NYSE:C) and BlackRock (NYSE:BLK) report earnings on Tuesday.
  • Results from Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) are due Wednesday.
  • Morgan Stanley's (NYSE:MS) earnings release is scheduled for Thursday.
  • U.K. Prime Minister Boris Johnson set a deadline of Thursday to thrash out the outline of a European Union trade deal.
  • European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group.

Market Moves

Stocks

Currencies

  • The Dollar Index pared a 0.25% to 0.1% to 93.14.
  • The euro fell 0.3% to $1.1783.
  • The British pound sank 0.3% to $1.3029.
  • The onshore yuan was little changed at 6.744 per dollar.
  • The Japanese yen weakened 0.1% to 105.44 per dollar.

Bonds

  • The yield on 10-year Treasuries fell two basis points to 0.75%.
  • The yield on two-year Treasuries decreased one basis point to 0.15%.
  • Germany’s 10-year yield declined one basis point to -0.55%.
  • Britain’s 10-year yield fell one basis point to 0.26%.
  • Japan’s 10-year yield decreased less than one basis point to 0.03%.

Commodities

  • West Texas Intermediate crude was little changed at $39.44 a barrel.
  • Brent crude was little changed at $41.74 a barrel.
  • Gold weakened 0.2% to $1,918.46 an ounce.

Investing.com

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.

';