Investing.com | Oct 08, 2020 12:22
Late Tuesday, President Trump tweeted his approval for a piecemeal package of small economic aid measures though nothing concrete has yet been agreed to. As well, even if that’s delayed, the new, emerging narrative buoying equities is that if Joe Biden takes the White House in November, and Democrats become the majority in both the Senate and the House, the path will be clear for a massive new stimulus package.
However, stimulus optimism continues to dent the dollar.
On Thursday, contracts on the S&P 500 built on Wednesday’s surge to a six-week high during the New York session, while European indices, including the Stoxx 600, climbed to monthly highs on the optimism, as well as positive corporate updates. The Stoxx 600 was boosted by travel and leisure stocks—two of the industries most impacted by the coronavirus.
From a technical perspective the pan-European gauge crossed over the 200 DMA, though is till within a rising flag bearish after the benchmark topped out. The index is currently retesting that top.
Yesterday, all eleven sectors of the S&P 500 were up, driving the index to higher by 1.75%. Even the technology sector staged a comeback as traders seemed to shrug off, at least for now, a House panel’s proposal for the biggest antitrust overhaul in fifty years, in an effort to rein in alleged abuses by meg cap tech behemoths Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL). The big four, which account for more than 15% of the S&P 500, drove much of yesterday’s rally.
Eli Lilly (NYSE:LLY) gained on its antibody drug progress, and Regeneron Pharmaceuticals (NASDAQ:REGN) jumped after hours when President Trump credited its experimental, dual-antibody cocktail for his recovery.
Wednesday was a case in point of how volatile markets are becoming. Plus, this could likely continue until after the Nov. 3 US elections.
Yields, including for the 10-year Treasury note, struggled between the 200 DMA and the highs of Aug. 28, to determine the trend.
It seems bond traders are also waiting for a resolution on stimulus, which is expected to depress bonds, allowing yields to hover high—if they pass.
The Dollar Index fell on Wednesday, giving up gains as newfound optimism for a stimulus, which anticipates more dollars in the system, would reduce the value of each unit fundamentally and increasing supply technically.
Fundamentally, the dollar is struggling on the constantly shifting news cycle regarding the fiscal package.
Technically, the greenback is fluctuating between the short-term uptrend, manifested by the bottom forming a rising channel and aided by the 50 DMA, and the medium-term, framed by the falling channel since the March high.
Gold climbed on dollar weakness.
Technically, it continues to wander between potentially conflicting fundamental themes, projected within conflicting technical patterns. The yellow metal may have completed a rising flag, bearish after completing a bearish symmetrical triangle. However, a move above $1,950 would flip market dynamics in the form of a completed bullish, falling wedge.
Bitcoin is being squeezed between the 50 and 100 DMA, forming a symmetrical triangle.
The digital currency is bearish after a H&S top pushed it below its uptrend line since the March bottom.
Oil rose for the second day, moving back above the $40 mark, boosted by the weaker dollar. It's been trading within a range for the past four months as traders look for additional fundamental signals regarding what might drive the price next
The imminent arrival of Hurricane Delta is threatening Gulf output, offsetting inventories, which increased by 501,000 barrels last week.
Technically, oil is being squeezed between the 50 and 100 DMAs as it attempts a second upside breakout to what should have been a bearish symmetrical triangle after the bearish rising wedge. Notice how the 50 DMA went from being the wedge’s support to the triangle’s resistance.
Written By: Investing.com
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.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.