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: Futures, Global Stocks Sink On Spiking Contagion; Oil Slumps

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJun 25, 2020 07:11AM ET
www.investing.com/analysis/opening-bell-futures-global-stocks-sink-on-spiking-contagion-oil-slumps-200528829
Opening Bell: Futures, Global Stocks Sink On Spiking Contagion; Oil Slumps
By Investing.com (Pinchas Cohen/Investing.com)   |  Jun 25, 2020 07:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • US coronavirus cases escalate, global eruptions reappear, pressuring equities
  • Dollar fluctuates after yesterday's bounce
  • Oil continues dropping

Key Events

US futures for the S&P 500, Dow Jones, NASDAQ and Russell 2000 all dropped along with global stocks on Thursday, as a spike in US coronavirus cases, plus renewed eruptions globally led the International Monetary Fund to downgrade its forecast for any recovery of the global economy. "In the absence of a medical solution, the strength of the recovery is highly uncertain and the impact on sectors and countries uneven," the IMF said in a blog post published yesterday. In addition, comparing Wednesday's release with a note the organization posted in April, "we are now projecting a deeper recession in 2020 and a slower recovery in 2021."

Oil extended a slide. Treasuries and the dollar were pushed higher.

Global Financial Affairs

Contracts on the four major US benchmarks were deep in the red, with NASDAQ futures down 0.8% at one end of the spectrum, while Russell 2000 futures were -2.1%.

The pan-European STOXX 600 was dragged sharply lower at the open by media and travel stocks. However—and counterintuitively amid rising odds of another lockdown—German airline Lufthansa AG (DE:LHAG) surged 21% after its shareholders agreed to a 9-billion-euro government bailout which would give the country a 20% stake in the business.

STOXX 600 Daily
STOXX 600 Daily

Though the index is currently clawing its way higher, European shares had been falling for the second day, after finding support by the 100 DMA, if they close at these levels. Still, the uptrend has been growing weaker, as the benchmark closed yesterday, for the first time, below its uptrend line from the March low, after failing to post a higher price above the June 5 high, possibly confirming a resistance of the 200 DMA.

Volume has been slumping. The MACD entered bearish formation and the RSI may be topping out. A drop below the June 15 low would establish a downtrend.

Earlier Thursday, Asian indices all flashed red. Australia’s ASX 200 underperformed, (-2.5%), after Qantas (ASX:QAN), the country's largest airline, said it would cut over 6,000 jobs and keep 15,000 additional workers on extended furlough.

South Korea’s KOSPI came in close behind, (-2.3%), after the government proposed expanding taxes on capital gains. And once again, China’s Shanghai Composite outperformed, (+0.3%). Indeed, it was also the only regional benchmark in positive territory, on investor hopes of COVID-19 outbreak control.

Here’s how drastically investors have pivoted from utter disregard of the pandemic to the current laser-focus on it and nothing else: Chinese shares rose even amid rising border tensions with India and ongoing trade uncertainty with the US.

China reasserted its sovereign claim over athe Galway Valley region vs India, even as foreign ministers from both countries attempt to lower the flames. China’s defense and foreign ministries both asserted that India had violated “bilateral agreements’ international rules and provoking the clash.”

On the Sino-US trade front, New York Times columnist Thomas Friedman wrote that the world’s two largest economies are “headed toward divorce.”

In the US, the COVID-19 case count accelerated, rapidly heading toward 2.5 million, with almost 122,000 deaths. The University of Washington forecasts 180,000 fatalities by October.

More than 13,000 federal workers face the risk of a 30-day or longer furlough as the topic of new lockdowns is considered. As well, today's US Initial Jobless Claims print is expected to top one million.

Disney (NYSE:DIS), which had planned to open its Florida and California resorts and theme parks on July 17 has now postponed reopening them indefinitely.

During yesterday's New York session, US stocks fell, as data showed that Florida and California had each hit new daily records for COVID-19 cases, altering the scenario for the much-anticipated reopenings. The S&P sank, (-2.6%) with all 11 sectors finishing lower. Even the mighty NASDAQ Composite fell, for the first time in nine sessions.

Treasurys climbed for the first time this week, with yields—including for the benchmark 10-year note—falling for a second day.

UST 10-Y Daily
UST 10-Y Daily

They're nearing the uptrend line since the May 21 low, the lowest since May 15.

After yesterday's surge, the dollar is gaining again today.

DXY Daily
DXY Daily

However, today’s fluctuation demonstrates resistance after completing a rising flag.

Gold slipped for a second day, a mirror image of the USD.

Gold Daily
Gold Daily

Nevertheless, we remain bullish on the yellow metal.

Bitcoin has been heading lower today.

BTC/USD Daily
BTC/USD Daily

The cryptocurrency bounced off the neckline of a potential H&S top.

Oil is slumping for a third day, as worries ramp up regarding limited reopenings if not outright lockdowns, all potentially leading to rising inventories. The commodity's price is facing additional issues too.

Oil Daily
Oil Daily

WTI is declining as the MACD provided a sell signal and the RSI a negative divergence.

Up Ahead

  • US Initial Jobless Claims, Durable Goods Orders and GDP data are all due later today.
  • A rebalance of Russell indices occurs on Friday.

Market Moves

Stocks

  • The Stoxx Europe 600 Index dipped 1%.
  • Futures on the S&P 500 Index declined 1.2%.
  • NASDAQ futures decreased 0.9%.
  • The MSCI Emerging Markets Index fell 0.8%.

Currencies

  • The Dollar Index was little changed after some wavering.
  • The euro dipped 0.2% to $1.1228.
  • The British pound decreased 0.1% to $1.2408.
  • The Japanese yen dipped 0.1% to 107.13 per dollar.
  • The South African rand weakened 0.8% to 17.5101 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased two basis points to 0.66%.
  • Germany’s 10-year yield dipped two basis points to -0.46%.
  • France’s 10-year yield fell one basis point to -0.117%.
  • Britain’s 10-year yield declined two basis points to 0.166%.

Commodities

  • West Texas crude oil dipped 0.6% to $37.46 a barrel.
  • Gold strengthened 0.3% to $1,766.33 an ounce.
  • LME aluminum decreased 0.8% to $1,563.50 per metric ton.
Opening Bell: Futures, Global Stocks Sink On Spiking Contagion; Oil Slumps
 

Related Articles

Opening Bell: Futures, Global Stocks Sink On Spiking Contagion; Oil Slumps

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 (5)
Jun 25, 2020 3:07PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Stop being political and just read the charts
Mike Tottenberg
Mike Tottenberg Jun 25, 2020 9:35AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
And right on cue, here comes Larry kudlow saying all is okay....V recovery still intact. they just won't let this market fall like it needs to.
Dion Argueta
Dion Argueta Jun 25, 2020 8:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Excellent points and summary of what's going on right now. VERY WELL SAID!!!! And shown!!!!
Pinchas Cohen
Pinchas Cohen Jun 25, 2020 8:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks, Dion!
William Smith
William Smith Jun 25, 2020 8:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
IMF, WHO. Two worthless organizations.
Michael Crowley
Michael Crowley Jun 25, 2020 7:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Blah blah blah Trump holds DOW above 25,000 as his last hope to stay elected
Andrew carson
Andrew carson Jun 25, 2020 7:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Don't worry Biden is in his basement if you need him.
 
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