U.S. Stock Market

U.S. Stocks Set To Continue Their Winning Streak

Early Signs Of Stabilization On The Virus Front Lead To Continuation Of The Rally

S&P 500 futures are pointing to a 3% gain in premarket trading following yesterday’s big upside move. The reason for the optimism is the same – the market hopes that the coronavirus situation will soon stabilize, and investors will be able to evaluate when the major economies will lift virus containment measures.

Currently, there are four countries that have more than 100,000 coronavirus cases – U.S., Spain, Italy and Germany, while France will likely join this list very soon. However, the pace of new infections is slowing down, which provides investors with hope that the situation is finally under control.

More Stimulus Measures Are Announced

While there are signs of stabilization on the virus front, the situation on the economic front will continue to worsen in the upcoming weeks.

EU finance ministers discuss a 500 billion euro aid package to facilitate recovery after the pandemic is over. Italy is ready to spend as much as necessary to help the economy get out of the current crisis.

In Japan, an almost $1 trillion stimulus package has been approved after the country declared coronavirus emergency. Currently, Japan has 3,906 coronavirus cases, according to data from Johns Hopkins University.

However, the population of Japan has a significant percentage of older people, so coronavirus presents an especially challenging problem for the country.

Japanese economy has been in poor shape even before the coronavirus crisis, and I doubt that even a $1 trillion package will help much, but the additional liquidity will certainly play a positive role for the world markets.

Uncertainty Over Oil Production Cut Deal Remains

Oil prices are flat today after major volatility in recent trading sessions as the market tries to evaluate whether major oil producers can reach a common ground and negotiate a realistic oil production cut deal.

At this point, it looks like Russia and Saudi Arabia want the U.S. to join the deal, which is a tough task. In case the production cut deal is reached, oil prices and oil stocks will get a boost, helping the market get to new local highs despite the worsening situation in the economy.