2020-05-22 • Updated
S&P 500 and other stock indexes rose over the past 12 months despite the global recession. Should you buy it now?
Coronavirus cases have almost reached 5 million. By the way, it’s just the official data, nobody really can say what is the true picture. Moreover, unemployment claims surged to unprecedented levels, economic activity fell to unseen lows. This list can be prolonged further and further. However, that didn’t bother investors. Why?
The first reason is that the Fed took all efforts to mitigate the damage from the coronavirus. It cut rates to zero, poured trillion dollars through aid packages, bought corporate bonds both high-rated and junk. After all this, Jerome Powell assured that there is a lot more ammunition the Fed can use if needed. So, there is no doubt that the economy will be safe no matter what. Those comments, of course, pushed the S&P 500 price upward.
We are approaching step by step to the end of the coronavirus pandemic. Many biotech companies are working day and nights to create the desired vaccine. Yesterday we got some promising results from one of them – Moderna, Inc.! After those optimistic news, the stock went up.
According to Ned Davis Research, about 58% companies of the S&P stock weren’t significantly damaged by the coronavirus. Moreover, top 5 companies such as Microsoft, Apple, Amazon, Facebook, and Alphabet outperformed this year. So, S&P 500 gained due to those 5 ones.
Now S&P gains, but most analysts believe that soon the S&P will reverse. As lockdowns eased and small businesses started to reopen, the coronavirus cases may rise again. Moreover, the Q2 earning season will bring terrible data that nobody has ever seen before. The negative sentiment will push stocks down eventually.
The S&P had been rising since March 23, then the price froze and entered the horizontal corridor. It hit 2950 twice and struggled to go up. That’s why, there is a high possibility that the price will soon fall down to 2784. If it does, it will dip further to 2705. Nevertheless, if some factors push it above 3000, it will surge to 3135 then.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Bearish Scenario: Sales below 80.00 with TP1: 79.34, TP2: 78.94, TP3: 78.55, and 78.00 Bullish Scenario: Buys above 78.00 (wait for a retracement to the zone) with TP: 79.34 TP2: 80.00, and TP3: 81.00
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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