After an excellent one day rally, it seems the bears have come back this morning to punish anyone that held long positions overnight with the US futures another substantial overnight reversal. With the central bank’s actions ineffective and federal government stimulus likely months away, the path forward for the market is clouded with uncertainty. With US infections jumping to more than 1000, its evident this outbreak will get much worse before it gets better, so expect the wild market volatility to continue.
Asian markets close red across the board overnight, but European markets see only green this morning after the bank of England cut rates by 25 basis points. Ahead of the CPI report and more than 100 earnings reports Dow futures to point to substantial gap down wiping out about half of yesterday rally in one fell swoop. Prepare for another wild day of price volatility!
Economic Calendar
On the Hump day earnings calendar, we have nearly 120 companies reporting results. Notable results include TACO, EXPR, HABT, LK, UNFI, VRA, & ZAGG.
Top Stories
Joe Biden takes a commanding lead in the Democratic race for the President wining in 4 more states last evening.
Italy’s infection number cross over 10,000 as the country mulls the idea of a full country shutdown. According to the CDC, the US confirmed infections jump over 1000, with the virus spreading to 30 states. The President pitched an idea of cutting payroll taxes to 0% for the rest of the year but didn’t hold your breath because stimulus packages commonly take more than 6-months.
Technically Speaking
The rally yesterday was great to get a little relief in the selling. Unfortunately, there is a lot of work to do before there we will see a significant improvement to the massive technical damage suffered by stocks and indexes. With the coronavirus numbers growing, federal stimulus actions having little to no effect, and health officials struggling to slow the spread of the outbreak, investors remain very uncertain about the path forward. This morning we face another overnight reversal with the Dow pointing to gap down of more than 500 points as this frustrating volatility continues to challenge even the most experienced traders. Sadly, it seems this problem is far from over, and traders should prepare for another day of wild price action.
Trade Wisely,
Doug
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