Opening Bell: U.S. Futures, Global Stocks Pop As Economies Reopen; Oil Slips

Opening Bell: U.S. Futures, Global Stocks Pop As Economies Reopen; Oil Slips  | May 26, 2020 11:52

  • US contracts, global stocks were all green on Tuesday, on easing lockdown measures
  • Oil slides as it nears the $35 mark

Key Events

US futures for the S&P 500, Dow Jones, NASDAQ and Russell 2000, advanced on Tuesday along with global stocks, as market focus shifted from US-China tensions to reopening economies and increasing signs that the worst of the downturn could be over.

The dollar weakened and yields rose. The yen declined, but gold pushed higher. Oil gave up an advance, slipping just below the $35 level.

Global Financial Affairs

Contracts on all four main US indices extended Friday’s advance for their underlying benchmarks this morning. S&P 500 futures struggled below the 200 DMA, reaching the highest levels since March 5.

After the long holiday weekend in the US, investors are rested and ready to challenge record highs, and willing to look past the economic devastation wrought by the COVID-19 pandemic and the uncertainty from rising tensions between the world’s two largest economies. Instead markets are currently concentrating on the unprecedented government stimulus already declared and the hope of a powerful recovery.

Contracts on the NASDAQ climbed to their highest level since Feb. 20 on Tuesday, when they hit an all-time high.

NQ E-mini Daily

As well, today, its 50 DMA crossed above the 200 DMA, triggering a Golden Cross.

The Stoxx Europe 600 Index opened 1.2% higher, buoyed by all 11 sectors, to the highest since March 6, as Germany recorded a decline in the number of corona virus cases. UK Prime Minister Boris Johnson announced plans for getting back to business, including reopening thousands of local shops, department stores and shopping centers next month, after which the FTSE 100 surged +1.9%.

Asia was also completely green: Australia’s ASX 200 shined brightest, (+2.93%), on hopes of a global economic recovery. This marks the second consecutive session of at least 2% gains for the benchmark down under.

Japan’s Nikkei 225 also shot higher, (+2.55%), as the world’s third-largest economy lifted its state of emergency. Even China’s Shanghai Composite, which underperformed other regional benchmarks, advanced by a respectable +1%.

Wall Street was closed on Monday in honor of Memorial Day in the US. And though trading last week was volatile, bulls had the final word as the S&P 500 and NASDAQ closed higher ahead of the long weekend.

Momentum seems to be to the upside, as bullish investors focus on the half glass full. Nevertheless, bears remain concerned that the glass is half empty, or maybe even broken. 

Yields, including for the 10-year US Treasury benchmark note, jumped as investors once again embraced risk.

UST 10Y Daily

From a technical perspective, rates are ranging with an upward bias, as they climbed back above the 50 DMA.

Conversely, the dollar fell as investors sold-off Treasurys.

DXY Daily

Technically, the greenback is trapped within a sideways pattern, as eager traders wait for a breakout before picking a direction.

Gold was flat, considered a positive sign amid a shift to risk-on from markets when US futures and global stocks advance.

Gold Daily

In part, the yellow metal hasn’t sold off thanks to dollar weakness. Technically, the precious metal gave up its daily highs, as it found resistance by the top of a falling flag—the third consecutive bullish pattern for the precious metal since February.

Bitcoin is rising for a second day.


However, while its 50 DMA crossed above its 200 DMA, triggering a golden cross, the cryptocurrency fell below its uptrend line since the March low, giving more power to its longer-term downtrend line since June. Nevertheless there are some high profile investors who believe that BTC will ultimately break out to the upside.

Oil has given up session highs at the time of writing, and is flat with yesterday's close.

WTI Daily

Technically, the commodity confirmed the May 21 shooting star’s resistance, bolstering our case for a pullback, which we described in Sunday’s post (link above).

Up Ahead

  • Earnings reports continue this coming week including from (NYSE:CRM), Costco (NASDAQ:COST) and Dell (NYSE:DELL).
  • On Thursday, the weekly U.S. Initial Jobless Claims reading is released. Over the past two months, nearly 40 million Americans have filed unemployment claims.
  • Federal Reserve Chairman Jerome Powell participates in a virtual discussion sponsored by Princeton's Griswold Center on Friday.

Market Moves



  • The Dollar Index fell 0.4%.
  • The euro gained 0.3% to $1.0932.
  • The British pound climbed 0.6% to $1.2264.
  • The onshore yuan was little changed at 7.134 per dollar.
  • The Japanese yen weakened 0.1% to 107.84 per dollar.


  • The yield on 10-year Treasuries increased four basis points to 0.69%.
  • The yield on two-year Treasuries climbed one basis point to 0.18%.
  • Germany’s 10-year yield climbed four basis points to -0.45%.
  • Britain’s 10-year yield increased two basis points to 0.191%.
  • Japan’s 10-year yield gained less than one basis point to 0.005%.


  • West Texas Intermediate crude gave up 3.6% gains and were flat at $33.92.
  • Brent crude increased 2.2% to $36.32 a barrel.
  • Gold weakened 0.2% to $1,728.64 an ounce.

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