Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Opening Bell: Directionless Markets Waver On Health Worries, Economic Optimism

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJun 22, 2020 07:23AM ET
www.investing.com/analysis/opening-bell-directionless-markets-waver-on-health-worries-economic-optimism-200528436
Opening Bell: Directionless Markets Waver On Health Worries, Economic Optimism
By Investing.com (Pinchas Cohen/Investing.com)   |  Jun 22, 2020 07:23AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • US contracts, stocks fell at the open, but then pushed higher
  • WHO reported biggest single-day surge for COVID-19 cases over the weekend
  • Gold flirted with a 7-year high

Key Events

Contracts on the four main US indices—for the Dow Jones, S&P 500, Russell 2000 and the NASDAQ—opened lower on Monday, though at the time of writing they've all reversed into positive territory. As well, the NASDAQ's gap closed.

Treasury demand increased and the dollar fell as gold headed higher.

Global Financial Affairs

The World Health Organization reported the biggest one-day jump in COVID-19 cases over the weekend, with more than 183,000 new cases worldwide. Over 30,000 of those occurred in the US, which actually hit that number two days in a row, on Friday and Saturday, the largest daily increase in the viral outbreak since May 1. On Saturday, seven states reported new record numbers. Moreover, Florida and South Carolina posted three straight days of single-day records.

This morning, European shares are struggling, pressured by the negative news across the region. The coronavirus outbreak rate in Germany jumped for a second day, spiking at a 60% increase in just 24 hours. Spain, one of the worst affected countries on the Continent, reopened its borders, which have been shut for 14 weeks, even as a second wave appears to be accelerating.

The STOXX Europe 600 Index fell at the open, dragged lower by a variety of high-profile stocks: Wirecard (DE:WDIG), the German fintech company currently beset by a scandal that includes 1.9 billion euro ($2.1 billion) of company funds gone missing; Lufthansa (DE:LHAG), which is facing a dramatic week as the state negotiates bailout terms for the German airline; and commodity miner and trader Glencore (LON:GLEN), now the subject of a Swiss criminal investigation on suspicion of corruption in the Democratic Republic of the Congo.

Earlier today, most Asian benchmarks finished lower on increased volatility, as confused traders sought direction when China and South Korea both reported a reduction in COVID-19 cases, while the pandemic hit records in other parts of the world.

South Korea’s KOSPI underperformed, (-0.7%), on disappointing export data and fears of a second wave, even as it reports lower virus numbers. Australia’s ASX 200, (+0.03%), was the only major regional index in the green, though just barely.

Still, the session wasn’t completely risk-off. Safe haven assets were not necessarily rising.

The yield on the 10-year Treasury retreated slightly, after initially advancing, even as equites and US contracts were being sold off.

UST 10Y Daily
UST 10Y Daily

Technically, yields were squeezed between the 100 and 50 DMAs.

The dollar fell, despite the increased demand for Treasurys, perhaps on foreign repatriation.

DXY Daily
DXY Daily

Technically, the dollar has been trading along a rising flag, bearish after the 4% selloff, from May 25-June 13. The RSI found resistance at the top of its falling channel, suggesting prices may follow momentum lower.

The USD, which has recently had something of a wild ride, strengthened against the yen, even though investors have been unwinding positions in equities and US futures.

Gold touched a 7.5 year-high.

Gold Daily
Gold Daily

The precious metal temporarily reached its highest level since October 2012, but retreated into a symmetrical triangle. If the yellow metal closes at this price or a little lower it will have formed a shooting star, whose bearish sentiment would be compounded by the resistance of the top of the pattern.

This is the return-fire by bears amid a bullish uprising, to break out of a presumptively bullish pattern. The RSI has already made such a breakout. Gold could be heading toward $1800, or even higher.

Oil is flat, lingering below the psychologically significant $40 level.

Oil Daily
Oil Daily

WTI is keeping in play the makings of a H&S top. The RSI provided a negative divergence, bolstering a bearish scenario.

Up Ahead

  • On Tuesday, investment analytics and index company MSCI Inc. (NYSE:MSCI) announces its market classification review for 2020.
  • The IMF will release new 2020 growth projections on Wednesday.
  • US Initial Jobless Claims, Durable Goods Orders and GDP data are all due out Thursday.
  • A rebalance of Russell indices is expected on Friday.

Market Moves

Stocks

Currencies

  • The Dollar Index slipped 0.2% to 97.42.
  • The euro rose 0.2% to $1.1196.
  • The British pound jumped 0.3% to $1.2386.
  • The onshore yuan fell 0.1% to 7.079 per dollar.
  • The Japanese yen weakened 0.1% to 106.95 per dollar.

Bonds

  • The yield on 10-year Treasuries dipped less than one basis point to 0.69%.
  • The yield on two-year Treasuries gained less than one basis point to 0.19%.
  • Germany’s 10-year yield fell one basis point to -0.42%.
  • Britain’s 10-year yield jumped one basis point to 0.238%.
  • Japan’s 10-year yield sank one basis point to 0.01%.

Commodities

  • West Texas Intermediate crude fell 0.6% to $39.53 a barrel.
  • Brent crude gained 0.2% to $42.29 a barrel.
  • Gold strengthened 0.2% to $1,747.87 an ounce.
Opening Bell: Directionless Markets Waver On Health Worries, Economic Optimism
 

Related Articles

Opening Bell: Directionless Markets Waver On Health Worries, Economic Optimism

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Saqib Muhammad
Saqib Muhammad Jun 22, 2020 8:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this all f fed just buying etfs and making bubble never seens any bullish in my life
Tim Prewitt
Tim Prewitt Jun 22, 2020 8:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the only caveat on the dollar is today's bar and RSI are not closed yet which at the moment is inconclusive data....
Pinchas Cohen
Pinchas Cohen Jun 22, 2020 8:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I wouldn't characterize fluidity as a caveat, but yes it's inconclusive, even if it's closed.
Jan Skilbrei
Jan Skilbrei Jun 22, 2020 7:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks for your charts+, you stick to the point, not overcomplicating, great : )
Pinchas Cohen
Pinchas Cohen Jun 22, 2020 7:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pleasure. Thanks. Glad yo enjoyed.
Haresh Chandwani
Haresh Chandwani Jun 22, 2020 7:17AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Of course, after all this "one-way direction" it has had for the past two months, it is perfectly alright for it to look in the other direction to see how deep the valley is!!! It's not looking back only out of fear of the depth below..
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email