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Opening Bell: Futures, Global Stocks Gain On Positive China Data; Yields Fall

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewMar 31, 2020 07:07AM ET
www.investing.com/analysis/opening-bell-positive-china-data-200520070
Opening Bell: Futures, Global Stocks Gain On Positive China Data; Yields Fall
By Investing.com (Pinchas Cohen/Investing.com)   |  Mar 31, 2020 07:07AM ET
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  • Investors weigh positive China data against global coronavirus cases increase
  • WHO sees some stability in European outbreak spread
  • Despite China PMI beat, Q1 GDP is anticipated to have sharply contracted

Key Events

Optimistic economic data out of China, released early Tuesday morning, has boosted contracts for the S&P 500, Dow Jones and NASDAQ, as well as European shares. In addition, most Asian markets closed higher this morning after Wall Street's positive finish yesterday.

Still, yields fell, indicating investors continue to balance the upbeat news out of China against the still-climbing number of confirmed global coronavirus cases. That figure, nearing 788,000, includes more than 164,000 in the U.S.; the death toll in New York City alone reached 914 fatalities at time of writing.

Global Financial Affairs

With its Manufacturing and Non-Manufacturing PMIs for March both showing a return to growth, China appears to have found its footing, at the same time the World Health Organization (WHO) sees some stabilization in the pandemic's spread in Europe. Nonetheless, analysts expect a severe contraction in China’s first quarter GDP—its first in 30 years—scheduled to be released at the end of April.

Of remaining concern for markets, a COVID-19 vaccine remains elusive.

After earlier slumping during the Asian session, futures contracts on the S&P 500 rebounded and are now taking on the intraday highs from Thursday and Friday.

SPX Futures Daily
SPX Futures Daily

From a technical perspective, S&P Futures have been congesting within a rising flag pattern, bearish after the preceding plunge. A downside breakout would signal another leg down.

A rally in travel and leisure sector shares, is lifting the pan-continent Stoxx Europe 600 Index which is heading toward Thursday’s highs.

Most of the Asian session was also in the green. Among the bigger regional players, South Korea’s KOSPI outperformed (+2.19%). Australia’s ASX 200 (-2.02%), sealed its worst monthly performance on record, pressured by recession concerns.

U.S. stocks gained for a fourth day within five sessions on Monday, led by healthcare shares.

SPX Daily
SPX Daily

Technically, however, we consider this a sharp return move for the S&P 500, following a sharp selloff. Note, the index closed below Thursday’s highs, which closed below the top of the benchmark’s falling channel. The 50 DMA crossed below the 200 DMA, triggering the much-dreaded Death Cross.

More than just a signal of falling prices over a broad range of measures, it generally indicates longer-term bearish conditions. Thus, the aptly named technical indicator resonates for all types of analysts, including those staunchly focused on fundamentals.

Yields, including for the benchmark 10-year Treasury, fell this morning, even with the apparent return of risk sentiment.

UST 10Y Daily
UST 10Y Daily

From a technical perspective, yields were forced lower after completing a rising flag, bearish in the aftermath of its downturn.

The U.S. dollar climbed for a second day.

DXY Daily
DXY Daily

It found support by the 50 DMA. If prices cross back over 100.00 we might see a second ascending trough, which would establish an uptrend.

Crude oil has rebounded above $21, after yesterday falling briefly below $20, intraday. As the price of oil continues to crater, Saudi Arabia and Russia aren't the only ones slugging it out for shrinking market share.

Oil Daily
Oil Daily

WTI's price is still below what we see as a bearish pennant, the second in a row, making it hard for bulls to carry the price higher. After the recent plunge, both RSI and MACD are looking good for a rally.

Up Ahead

Market Moves

Stocks

  • Futures on the S&P 500 Index climbed 0.6%.
  • The Stoxx Europe 600 Index increased 1.5%.
  • The MSC Asia Pacific Index fell 0.3%.

Currencies

  • The Dollar Index climbed 0.3% to 99.49.
  • The euro decreased 0.5% to $1.0995.
  • The British pound fell 0.9% to $1.2298.
  • The Japanese yen yen dipped 0.7% to 108.50 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased four basis points to 0.69%.
  • Germany’s 10-year yield rose one basis point to -0.48%.
  • Britain’s 10-year yield climbed seven basis points to 0.402%.

Commodities

  • Gold fell 0.4% to $1,615.76 an ounce.
  • West Texas Intermediate crude rose 5.1% to $21.11 a barrel.
Opening Bell: Futures, Global Stocks Gain On Positive China Data; Yields Fall
 

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Opening Bell: Futures, Global Stocks Gain On Positive China Data; Yields Fall

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Comments (8)
Strela Fxxx
Strela Fxxx Mar 31, 2020 12:48PM ET
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Let's look at Spain, Germany, Italy. the economy is falling apart, the great recession!
Anand T N
Anand T N Mar 31, 2020 8:15AM ET
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Chinese greatest manipulators of the world.... and people believe it!!!
Maleka Thabo
Maleka Thabo Mar 31, 2020 8:15AM ET
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they're not manipulators.... they're inventors..... white people are the ones who manipulates
Jabie Bulie
Jabie Bulie Mar 31, 2020 8:10AM ET
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Quoting data from china, as legit and accurate ? Where is your verification ?
Iam Iam
Iam Iam Mar 31, 2020 7:51AM ET
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did the WHO consider that Spain has deadliest day ?
Joao Abo-gaux
Joao Abo-gaux Mar 31, 2020 7:50AM ET
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Futures are falling
Ivan Couto Jr
Ivan Couto Jr Mar 31, 2020 7:49AM ET
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come on........Powell and Trump already said the US economy is all time strong. ******the comunists that are selling equities. Like Bezos and other millionaires with inside info
Sanjay Mahar
Sanjay Mahar Mar 31, 2020 7:48AM ET
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any andestaning currancy trading please help
Jessica Hensley
Jessica Hensley Mar 31, 2020 7:11AM ET
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wonder why we have so much paperwork wjen i u know were to put the st9ck and take from to strat with they just empty accounts anyway
Glen Rautio
GlentheTaper Mar 31, 2020 7:11AM ET
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What?
Nicholas Segalle
Nicholas Segalle Mar 31, 2020 7:11AM ET
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Glen Rautio pretty sure they had a stroke. Should we call someone??
 
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