Hope for the COVID-19 vaccine and optimism ahead of employment data are boosting stocks as a long holiday weekend of July 4 awaits US investors.
But as cities and businesses roll back reopens, some suggest caution with June payrolls (weekly jobless figures are coming, too). Christopher Dembik, head of macroeconomic analysis at Saxo Bank, suggests monitoring the U-6 unemployment rate simultaneously, as it better measures job underutilization:
Actions will undoubtedly be watching, leading us to our call of the day, which looks at what could lead to great ups and downs for the S&P 500 SPX,
In the next weeks.
“Looking ahead, the biggest risk to the markets is a return of panic, as we saw in the background on March 23, where the money was just trying to get out. The only way that panic at that magnitude returns is if the% of positive cases continue to trend higher from the lows, which is quite possible in the fall, “writes Adam Kobeissi, founder and editor-in-chief of the Charter. from Kobeissi, an investment newsletter.
Kobeissi said the percentage of cases in the US is currently around 6%, from a low of 4.5%, according to Johns Hopkins University. If that number starts to rise, he expects the S&P to start to fall back. Keep in mind that cases in the United States topped 50,000 for the first time on Wednesday.
In the short to medium term, he said the path of least resistance for stocks appears to be higher, with the technical picture suggesting a move to 3,150, which marks the high from June 15 to June 23, and a breakout by on top of that send the index to 3,275.
But from there, the index could slide back to a low of around 3,000 seen this week, in part due to COVID-19 concerns. “It is important to note that ‘highest lows’ have been formed SIX times since March 23, and the support range 2965-3000 marks the last two ‘highest lows.’ A break below 2,965 opens a downside significant, and we would expect to see 2,730 in a few trading sessions, ”said Kobeissi.
The market
Dow YM00,
S&P SPX,
and Nasdaq COMP,
futures are rising before the holiday on Friday, while European stocks SXXP,
They are also in the black. Markets were mostly higher in Asia.
The economy
Economists expect some 3.9 million jobs were restored or created in June, with all eyes on a May review after a staggering 2.5 million gain. Weekly claims are expected to show 1.4 million jobless claims. The trade deficit and factory orders are also due.
The graphic
Technology continues to balance its weight, as this chart from Goldman Sachs shows:
“At the peak of the technology bubble, information technology never generated more than 14% of S&P 500 earnings. The contribution to earnings of information technology increased in recent years and the sector now represents 21 % of S&P 500 net income, ”says US equity strategist David Kostin and a team in a note.
The buzz
Tesla TSLA,
Stocks are rising after Wedbush analysts raised their target to $ 2,000 and the highest on Wall Street.
As the mask debate continues, President Donald Trump says he looks like the Lone Ranger in one. Security flaws in hotels used for COVID-19 quarantined visitors to Melbourne may have caused new outbreaks in that Australian city. As New York and other virus hotspots return to indoor dining before the July 4 weekend, Los Angeles has released a color-coded system for COVID-19 threats.
A federal government program that provides forgivable loans to small businesses affected by the coronavirus crisis is slated to obtain another extension.
Facebook FB,
CEO Mark Zuckerberg is apparently not concerned about the hundreds of companies that have joined the temporary advertising boycott of the social media giant.
Random readings
The Rolling Stones and former Beatle Paul McCartney team up to save the live music industry.
Protesters with pitchforks targeted the wealthiest of New York’s Hamptons.
The Harvard graduate says she was fired over a viral TikTok video.
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