A Strong Weekly Open On Wall Street

Posted Monday, March 30, 2020 by
Shain Vernier • 2 min read

The bulls are back on Wall Street as is a slight risk-on posture. Through the first half of the trading day, the DJIA DOW (+475), S&P 500 SPX (+65), and NASDAQ (+205) are all in the green. For the moment, it appears that investors are at ease with unlimited FED QE, government stimulus, and U.S. businesses being closed through April 30.

Today’s U.S. economic calendar is relatively vacant. Aside from COVID-19 headlines, only a few peripheral reports were released:

Event                                                                   Actual         Projected        Previous

Dallas FED Manufacturing Index (March)      -70.0                6.2                     1.2

3-Month T-Bill Auction                                        0.085%           NA                  0.000%

6-Month T-Bill Auction                                        0.10%             NA                    0.08%

It’s a simple point, but U.S. manufacturing is showing signs of coronavirus fatigue. The Dallas FED reported a record drop in activity and president Robert Kaplan stated that last week’s stimulus package was “relief,” not a viable solution. Although a slump in manufacturing is expected, the degree of the downturn is a bit alarming.

At this point, the markets appear to have already priced in Kaplan’s concerns. Risk is back in style and U.S. Treasury yields are showing signs of life. All in all, Wall Street is optimistic about how the U.S. economy will fare in the post-coronavirus months.

Are The Bulls Back On Wall Street?

June E-mini DOW futures are in the green, but still in bearish territory. For the time being, prices are hovering near 22,000 and attempting to regain some of Friday’s losses.

Wall Street
June E-mini DOW Futures (YM), Daily Chart

Here are the key levels to watch this week for the June E-mini DOW:

  • Resistance(1): 38% Retracement, 22,448
  • Support(1): Spike Low, 18,086

Overview: Sunday’s announcement that the current U.S. COVID-19 precautions were to be extended through April 30 have done little to hamper the bullish sentiment on Wall Street. Although the overall tone is positive, the rally may be short-lived. At this point, institutional money is “cautiously optimistic” to open the week.

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