The FOMC Chairman Jerome Powell said they stand ready to do whatever is necessary to support the economy but also warned that the recovery is likely long-lasting impacts for business and employment.  He also called on Congress and the Whitehouse, suggesting more will be required to stimulate the economy.  According to reports, China has launched cyberattacks against virus research firms attempting to steal possible treatment options.  With friends like this who needs enemies!

Asian markets closed the day lower across the board, with Japan falling nearly 2%.  European markets are trading lower this morning with the FTSE down more than 2% this morning.  US Futures have flirted with a flat to slightly bearish open as we wait on earnings and, of course, another jobless report that may add 2.5 million to the 33 million already unemployed.  Expect higher price volatility as we head toward the weekend.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have our biggest day this week, with 300 companies reporting.  Notable reports include AMAT, ACB, BAM, DENN, NOLK, PBR, SSYS, & WIX. 

Technically Speaking

The futures tried to get a rally going in yesterday’s pre-market but was unable to hold onto gains gaping lower after a disappointing PPI number.  Jerome Powell delivered a word of warning that the recovery is likely to be difficult and may have lingering impacts for several years.  He reassured that the FOMC would continue aggressive operations as long as necessary and but said they would need more help from Congress to stimulate the economy.  Long story short, this will be a costly, challenging, and likely very volatile economic recovery.  In other news, the US is reporting that the Chinese government has launched cyber-attacks against virus research facilities attempting to steal research on treatments and possible vaccines.  Companies are encouraged to strengthen their security and report any attacks or breaches to the FBI. 

At the close yesterday, the DIA was less than 3 points away from it’s 50-day moving average and near a critical level of price support.  The IWM missed testing it’s 50-day by only a few ticks before bouncing in the last few minutes of the day.  The SPY held at the price support to 5/4/20 clinging to the 34 EMA, but looking at the QQQ, the selloff of the last couple days is nothing more than an overextended pullback.  We have a somewhat volatile overnight future session that currently suggests a flat to moderately bearish open.  However, with 300 earnings reports and another jobless number where another 2.5 million people will be added, the 33 million already unemployed, anything is possible by the open.  With a big day of economic data on Friday, we should expect an extra dose of price volatility as we slide into the weekend.

Trade Wisely,

Doug