Last Friday saw the stock market rally and hitting 3-month high and DOW up 3% for the day. This jump was against a backdrop of renewed conflict between the US and China and the violent protests in some US states.
But there were a few positive points last Friday with the markets expecting unemployment figures to shoot up to 20% from 14.7%. But surprisingly drop to 13.3 %. This might be a prelude to most US states slowly opening up from a coronavirus lockdown. Airline stocks and Boeing led the way.
On the technical side, the DOW charts broke the fibo 50% resistance which has been holding at around 24,500. As a cautionary note, with the strong US market, this might put the brakes on Government stimulus package which is fueling this rally.
We will know further after the FOMC this Wednesday if the stimulus will roll on longer.
DOW 30 ETF Chart
DOW : 27,110 - 5.0% YTD
S&P 500: 3,194 - 1.1 % YTD
Nasdaq: 9,814 + 9.4% YTD
With the OPEC meeting moved ahead, Russia and Saudi Arabia wanted to extend output cuts of 9.7Million Barrels per day. US WTI is rallying close to $40 per barrel. Pushing up prices is a tropical storm in the Gulf of Mexico. If OPEC+ won’t be able to agree on the output cuts, then production will slowly move higher filling up the storage facilities.
Crude Oil Chart
Gold plunged last Friday to its lowest price in April. Gold is a safe haven investment during these uncertain times but with the positive employment report and most US States reopening after two months of lockdown, money is moving into equities. But with government stimulus and weak US dollar, gold should not fall much from the current level.