Monday, June 15, 2020 - SPX 3066.59 +.83%, NDX 9776.89 +1.1%, DJIA 25763 +.6%
The markets were greeted with a gap down opening on Monday, as news of an increase in COVID-19 infection levels both in the United States and China took hold. The Dow futures had traded down a thousand points at 3:00 a.m. New York time, but by the 9:30 opening they had recovered considerably setting a positive tone for those aware of the overnight reaction. As the day progressed the Fed announced that it would begin a corporate bond buying program, and there was also talk of a progress on a vaccine. By the end of the day the market continued to rally off the opening levels to end the session positive on the day from the Friday close. Affirming for many that the increased liquidity provided by the Fed and the fiscal stimulus / massive deficit spending by Congress would continue to elevate asset prices in the face of ongoing bad economic and health news. As the saying goes, “it’s not the news, it’s the reaction to the news that is most important.”
Tuesday, June 16, 2020 - SPX 3124.74 +1.9%, NDX 9949.37 +1.76%, DJIA 26290 +2.05%
Stocks gapped higher in continuation of the move brought on from Monday’s news on the corporate bond buying program being implemented by the Fed. Also adding power to the move was the release of retail sales for May which showed a record jump of 17.7% (double economist estimates), as consumers appeared to aggressively spend their federal stimulus checks. Also adding to the move was more positive news on treatments for the Covid-19 virus. The markets faded at the close of the day.
Wednesday, June 17 2020 – SPX 3113.49 -.36%, NDX 9982.48 +.33%, DJIA 2620 -.65%
Stocks traded mixed in a quiet session with not much news flow to give impetus to a directional trade. But there were several news items during the day that may become a focus 1) the Senate moving legislation to remove legal protections for big tech firms such as Google and Facebook. 2) China / India border conflict over water in the Himalayas. The market closed mixed on the day, with the S&P 500 down and up on the Nasdaq 100.
Thursday, June 18, 2020 – SPX 3115.34 +.03%, NDX 10012.05 +.03%, DJIA 26080 - .015%
Stocks again traded mixed on limited news and a perception in the news that COVID-19 may become a much more treatable disease. About mid-morning The Wall Street Journal reported “Americans have skipped payments on more than 100 million student loans, auto loans and other forms of debt since the coronavirus hit the U.S., the latest sign of the toll the pandemic is taking on people’s finances.” Keep an eye on credit and banking.
Friday, June 19, 2020 – SPX 3097.74 -.56%, NDX 10008.64 Flat, DJIA 25871 - .8%
Options expiration Friday saw much greater volume and volatility then the prior three sessions. At 8:30 AM The Bureau of Labor Statistics released total nonfarm payroll employment rose by 2.5 million in May, and the unemployment rate declined to 13.3 percent. Much better than expected. Towards the end of the session the market became weak and closed down. But the ‘tell’ for this Monday is the fact the front month S&P500 futures continued to sell off, closing down 40.25on the day in the extended session.
The Week Ahead
8:30am - Chicago Fed Nat Activity Index
AAPL 1pm- WWDC 2020 where it will show new iPhone, Mac and iPad software
Also, Credit Suisse 2020 Biotech Conference & Bank of America Napa Healthcare Virtual Conference
Oil – China May trade data, incl. oil products imports and exports
8:55 am - Johnson/Redbook weekly sales
9:45 am – Markit Flash PMIs for June
10 am - New Home Sales
10am - Richmond Fed Manufacturing Index (continued on next page)
4:30 pm – API data for Crude, Gasoline and Distillates
Jefferies 2020 Global Consumer Virtual Conference, Nantucket
BMO 2020 Prescriptions for Success Healthcare Conference
7am - MBA Mortgage Applications
9am - FHFA House Price Index
10:30 am – DOE data for Crude, Gasoline and Distillates
12:30 pm - Fed’s Evans Takes Part in Virtual Discussion on Economy
3 pm - Fed’s Bullard Discusses the Economy and Covid-19
8:30 am – Q1 GDP, Core PCE, Advance Trade Balance and Wholesale Inventories
8:30 am – Weekly Jobless Claims
10:30 am – Natural Gas Inventory data
11:00 am - Kansas City Fed Manf. Activity
11 am - Fed’s Bostic Takes Part in Virtual Discussion on Economy
4:30 pm – Fed Releases SMCCF (ETF Buying) Data Here
4:30 pm - Results from Fed’s annual tests of banks’ ability to weather a financial crisis (CCAR)
NKE - Numbers Wells Fargo “Bricks to Clicks” Digital Conference, New York
8:30 am - Personal Income and Spending / PCE Deflator
10 am- U. of Mich. Sentiment
1 pm - Baker Hughes Rig Count
3:30 pm Commitment of Traders data
4pm - The Russell US reconstitution is implemented after market close
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