China Is Set To Increase U.S. Farm Purchases
According to a Bloomberg report, the U.S. held talks with China in Hawaii and China aggreed to increase the pace of U.S. farm product purchases.
Previously, the potential increase of U.S. – China tensions amid the coronavirus pandemic was viewed as a potential risk to market upside. However, the market has mostly ignored this risk, and stocks barely reacted to mutual accusations between U.S. and China.
Now that the Phase 1 of the trade deal continues to progress, traders have another reason to buy stocks as they bet on a swift recovery from the coronavirus crisis.
S&P 500 futures are gaining ground in the premarket trading session, reflecting the optimism about the decrease of U.S. – China tensions.
WTI Oil Rallies Above $40
Oil is in a bullish mood as traders believe that the reopening of the world economy and the production cuts implemented by OPEC+ members and other countries will help the market reach better balance in the second half of the year.
Previously, WTI oil prices struggled to settle above the $40 mark while Brent oil have already moved above this level. Finally, WTI oil looks ready to continue its upside move.
A move above $40 could lead to increased upside momentum and provide support to oil-related equities. In turn, the increase of demand for oil stocks will likely push the general market higher.
The Market Ignores All Risks And The Rally Looks Set To Continue
Yesterday, the Continuing Jobless Claims report showed that more than 20 million Americans were still receiving unemployment benefits. Analysts expected that this number will decline below 20 million.
Meanwhile, some U.S. states are facing a significant increase in the number of new coronavirus cases, which does not bode well for the speed of economic and labor market recovery.
The market has previously ignored all bad news and continues to shrug off any negative data. This highlights the enormous bullishness behind the current upside trend.
At this point, it looks like S&P 500 will need a very serious negative catalyst to get below the 3000 level again. Without such catalysts, S&P 500 will soon reach 3200 and get to new highs.
For a look at all of today’s economic events, check out our economic calendar.