Breaking News
0

Week Ahead: COVID Second Wave To Halt Reopenings, Hammer Markets; Gold Higher

By xhaszzx.com (Pinchas Cohen/xhaszzx.com)Market OverviewJun 28, 2020 07:26AM ET
xhaszzx.com/analysis/week-ahead-covid-second-wave-to-halt-reopenings-hammer-markets-gold-higher-200529068
Week Ahead: COVID Second Wave To Halt Reopenings, Hammer Markets; Gold Higher
By xhaszzx.com (Pinchas Cohen/xhaszzx.com)   |  Jun 28, 2020 07:26AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • S&P 500 hovering above monthly low
  • Yields fall to 6.5 week low
  • Gold posts third weekly advance; Bitcoin falls for the sixth straight day
  • Oil stuck below $40

Rising evidence of the much-feared, COVID-19 second wave hammered US equity markets on Friday and will likely continue to weigh heavily on global and local financial markets during the upcoming week. All four major US indices—the S&P 500, Dow Jones, NASDAQ and Russell 2000—slumped, each dropping more than 2% on the day.

On Saturday, the US saw a record number of new coronavirus cases reported, 44,782. It was the second day in a row that the American new case count topped 40,000. In response, a number of states that had previously begun reopening, or were never fully closed, announced they were pausing or slowly shutting down.

During the final day of trade, Treasurys rose to a 6.5 week high and the dollar gained.

Pandemic, Facebook, Banks Pressure US Indices

After the escalating case count was publicized, the governors of two of the hardest hit states announced new measures: the governor of Texas expressed regret for reopening bars and restaurants so quickly and rolled back the reopenings; Florida's governor said Miami-Dade county beaches would be closed for the coming weekend's Fourth of July holiday.

Will other states follow, as the pandemic accelerates across the southern US? It‘s noteworthy that both governors are Republican and had previously scoffed at implementing health measures which would have been contrary to President Donald Trump’s desperate move to minimize the effects of the contagion and instead restart the US economy ahead of the US election which is only four months away. It’s also noteworthy that Florida is crucial swing state for incumbent.

The S&P 500 plunged 2.4% after news of the halt to reopenings broke.

SPX Daily
SPX Daily

The broad benchmark fell to a two-and-a-half week low. An additional 0.24% drop would bring the SPX to a monthly low.

From a technical perspective, the index has been showing signs of weakness. It's unable to climb back above its broken uptrend line and make new highs, potentially forming a H&S top. In addition both the MACD and RSI are now bearish.

The broader market slide was exacerbated by an expanding advertiser boycott of Facebook (NASDAQ:FB), an effort organized by civil rights groups protesting the social media giant's refusal to remove hate speech from the platform.

Finally, shares of big banks plummeted after the Federal Reserve, citing coronavirus fears, restricted dividend payouts and buybacks. The results of its annual stress test, released Thursday, showed, "U.S. banks are strong enough to withstand the crisis and [the Fed] restricted dividend payouts and buybacks to make sure they stay that way. found that some banks could be too close for comfort to minimum amid the worst pandemic in a hundred years."

The index lost 3% for the week, even as consumer spending surged 8.2%, a new record, made more notable as virus cases increased as well over the same period. The fact that Americans were likely spending government relief payments may mitigate the significance of the data, since it may not represent the spending of funds earned by consumers.

As the old adage notes: “easy come, easy go.” On that score, personal income plummeted, from last month's 10.8% to well below the estimated -6.0%, actually hitting -4.2%.

The selloff comes after investors have been ignoring pandemic risks for weeks now, hoping instead for a V-shaped economic recovery, something that continues to seem less and less probable.

Yields, including for the US 10-year Treasury, fell to 6.5 week low, developing below the 50 DMA for a full daily session, for the first time over the same time-period.

UST 10Y Daily
UST 10Y Daily

The 100 DMA provided a greater resistance than the 50 DMA, while the 200 DMA loomed far above. The next test is the hammer of June 15.

The dollar trimmed losses from its drop on Monday and Tuesday.

DXY Daily
DXY Daily

Chart powered by TradingView

It climbed to just 0.2% from its previous drop over the following three days. Friday’s intraday high found resistance by the June 19th high of the rising flag, completing a return-move. Even the 4-basis point yield drop, on an increase in Treasury demand, wasn’t enough to push the dollar above the flag’s supply.

The MACD turned bullish and the RSI broke above its falling channel. We’re still betting on the price’s falling channel, as well as the falling flag.

Gold rose 1.5% for the week, its third weekly advance and its longest up-move since January.

Gold Daily
Gold Daily

Recently, the precious metal broke free of both a falling flag and a symmetrical triangle, following a H&S continuation pattern, and was due for a pullback. After bouncing off its rising channel since June, it could be ready to resume its ascent.

BTC/USD Daily
BTC/USD Daily

Bitcoin fell for the sixth straight day. On Saturday, it closed below our interpretative neckline of a H&S top.

Oil continued to trade below $40.

Oil Daily
Oil Daily

The commodity slipped 0.6% on Friday, registering an overall 3.2% decline for the week, even after Russia gutted exports of its flagship crude Urals to the lowest in at least a decade. Technically, WTI may be topping out below the 200 DMA, with both MACD and the RSI providing negative divergences.

The Week Ahead

All times listed are EDT

Sunday

19:50: Japan – Retail Sales: expected to 'recover' to -11.6% from -13.9% previously.

Monday

10:00: US – Pending Home Sales: seen to surge to 19.7% from -21.8%.

21:00: China – Manufacturing PMI: anticipated to edge down to 50.4 from 50.6.

Tuesday

2:00: UK – GDP: probably remained flat at -1.6% YoY and -2.0% QoQ.

5:00: Eurozone – CPI: looks to remain steady at 0.1%.

8:30: Canada – GDP: forecast to further decline to -12.0% from -7.2%.

10:00: US – CB Consumer Confidence: likely to have climbed to 91.6 from 86.6.

19:50: Japan – Tankan Large Manufacturers Index: predicted to have dropped to -31 from -8.

19:50: Japan – Tankan Large Non-Manufacturers Index: expected to slumped to -18 from 8.

21:45: China – Caixin Manufacturing PMI: seen to edge down to 50.5 from 50.7.

Wednesday

3:55: Germany – Manufacturing PMI: probably stayed steady at 44.6.

3:55: Germany – Unemployment Change: expected to halve to 120K from 238K.

4:30: UK – Manufacturing PMI: anticipated to have remained flat at 50.1.

8:15: US – ADP Nonfarm Employment Change: forecast to soar to 3,000K from -2.760K.

10:00: US – ISM Manufacturing PMI: expected to rise to 49.0 from 43.1.

10:30: US – Crude Oil Inventories: printed at 1.442M last week.

14:00 – FOMC Meeting Minutes

Thursday

8:30: US – Nonfarm Payrolls: predicted to have gone up to 3,074K, up from 2,509K.

8:30: US – Unemployment Rate: expected to edge down to 12.3% from 13.3%.

21:30: Australia – Retail Sales: anticipated to jump to 16.3% from -17.7 percent.

Friday

4:30: UK – Services PMI: like other UK data, expected to remain steady at 47.0

Week Ahead: COVID Second Wave To Halt Reopenings, Hammer Markets; Gold Higher
 
Week Ahead: COVID Second Wave To Halt Reopenings, Hammer Markets; Gold Higher

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at xhaszzx.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (44)
Zibran Vohra
Zibran Vohra Jul 01, 2020 6:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Now its magic time :)
Stefon Sauerwein
Stefon Sauerwein Jul 01, 2020 5:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Not alot of “hammering” going on. Perhaps wishful thinking from a biased pov.
Brad Smith
Brad Smith Jun 30, 2020 9:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks for the updates Pinchas. There have been talk of another round of stimulus but I'm not so sure if it will happen considering the current sentiment.
Kevin Wilkie
Kevin Wilkie Jun 30, 2020 8:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
you couldn't have been more wrong about market direction, next time flip a coin.
Dutch East
Dutch East Jun 30, 2020 8:53PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The president is his own best basher, if he needs more help he can always ask Bolton to write a tell all book and later do a movie.
Hi Votrach
Hi Votrach Jun 30, 2020 5:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Heyy
Kathie ILL
Kass1212 Jun 29, 2020 2:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Your technical analysis is appreciated, but your political opinion is NOT!  What is your point in bashing our President and Republican governors?  So which states had out of control violence, looting and burning the past couple of weeks?  I believe the cities involved are governed by Democrats.  Please keep your political "observations" to yourself.
CECIL DESA
CECIL DESA Jun 29, 2020 12:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
One of the best analysis and technical charting I have seen recently
Jose Emenis
Jose Emenis Jun 29, 2020 12:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Trump is going to increase the National Debt to $30 trillion before the end of this year...
Kathie ILL
Kass1212 Jun 29, 2020 12:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pushed by the House Democrats to spend a large part of the money on frivolity.
McKillin It
McKillin It Jun 29, 2020 12:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No covid is.
Michael Angelo
Michael Angelo Jun 28, 2020 10:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Only can be call second wave based on news, headlines and misinformation spread by white house creating a false opening because need to get some taxes back. No matter people dies, live or get seek. A total irresponsabilité but we're used to it from the chipmunk. If he goes right can win the elections otherwise, him and the *** don't care. Meanwhile stocks in trading range with surprising days. Till the vaccine.
nick serata
nick serata Jun 28, 2020 10:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Here goes Pinchas again with a complete speculative outlook. @Pinchas Do you really believe that techinal analysis is accurate at this exact time in the market? Technicals try to show predictability in a predictable market. We are not in a predictable market. Take last months jobs added vs expectations and the market spiked. No one really has any idea, especially the algos.I would rather you not write an article because you dont know something vs spewing speculative information like you do know something. “It ain't what you don't know that gets you into trouble; it's what you know for sure that just ain't so”
Randall Wagner
Randall Wagner Jun 28, 2020 9:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
FUTURES look green to me. Ha Ha! Fake news doesn't work all the time.
bruce johnson
bruce johnson Jun 28, 2020 9:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
over. 40,000 a day WOW
Randall Wagner
Randall Wagner Jun 28, 2020 9:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Your political opinions of extreme socialism are meaningless and makes your articles the same.
Pinchas Cohen
Pinchas Cohen Jun 28, 2020 9:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm a capitalist.
Kathie ILL
Kass1212 Jun 28, 2020 9:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pinchas Cohen  Good luck with that once the socialists take over...
Eric Hudnall
Eric Hudnall Jun 28, 2020 9:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You should keep the politics out of your analysis. NY and CA are left fruitcake states, and they're not doing well either.
TJF Denver
TJF Denver Jun 28, 2020 9:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Im ready to ditch http://xhaszzx.com altogether ... sick of politics in what should be a purely financial analysis
Jason Patcher
Jason Patcher Jun 28, 2020 9:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
markets are politics, have been for a few years now; brexit, trade wars, tariffs, bailouts.... stocks haven't traded by PE ratios in years
Kathie ILL
Kass1212 Jun 28, 2020 9:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Isn't Cuomo the one who is responsible for thousands of elderly deaths in nursing homes?
Gim David
Gim David Jun 28, 2020 8:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What's he saying wiith 2nd wave when the 1st one isn't even over yet??
Josh Miller
Josh Miller Jun 28, 2020 8:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Its an easy market to short when people keep pumping the covid every time the market goes up. Easy peasy.
icouldnotthink67 .
icouldnotthink67 . Jun 28, 2020 6:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
France said they had 216 clusters of COVID-19 just 12 days ago. They seem to be doing the don't test and it won't look bad approach.
Pratt Man
Pratt Man Jun 28, 2020 6:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm all in with another 5% down
Tom Jones
Tom Jones Jun 28, 2020 6:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I am willing to miss some upside versus drawing down cuz this market cannot be trusted.
Don Getty
Don Getty Jun 28, 2020 6:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
buffets approach is be fearful when others are bold and bold when others are fearful - I sold 70% early last week just off the highs and am now ahead the two down days that ended the week - I anticipate a week of bad possibly two! Hope you don't get burned but odds are seriously against you!
James Dorward
James Dorward Jun 28, 2020 5:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fasten your seatbelts for a rough week. No retirement in near future as 401K is gonna tank. Terrible times. Market is undervalued. Long term investors only.
Tom Jones
Tom Jones Jun 28, 2020 5:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Exchange most of your 401k funds into the money market option amd you will sleep better.
lewis palmer
lewis palmer Jun 28, 2020 5:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
gold and silver for the sleep better trade
Tom Jones
Tom Jones Jun 28, 2020 4:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We are still in the fitst wave. The second will start in the fall in the Northeast. Buying Oct SPY puts.
Tom Jones
Tom Jones Jun 28, 2020 4:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I am from the NY/NJ area, and we are not seeing a “second wave”. We are seeing the first wave in states that were too quick to reopen, or never truly shut down in the first place. You would think the morons and politicians in these states would have learned from witnessing what happened in NY/NJ/CT. But nope, instead of believing the science, they chose to believe stupid, selfish and ethically and socially UNconscious lawmakers, and now they are paying for it. Unfortunately, they are taking the markets down with them, so we are now paying for their greed and stupidity, as well. Shorting Oct SPY, cuz by that time the Northeastern US will indeed be seeing a “second wave”, and we will shut down again.
eddie glass
eddie glass Jun 28, 2020 2:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
love how the media is calling more testing the "second wave", the death rate has officially fallen below that of the common flu. meaning people who get the common flu have a higher likelihood of dying than covid
Don Getty
Don Getty Jun 28, 2020 2:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
actually eddie - your still in the first wave, second more younger people are getting it right now but that will spread to their older relatives in a week or two your going to see a serious spike in the death rate and hospitals in many are beyond capacity! Its what all the experts have been warning about and the GOP have ignored - as they have seen in Texas, Arizona and Florida - if you govern badly you get to own your errors!
Klaus Weyers
Klaus Weyers Jun 28, 2020 2:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
stay short..big drop only beginning
Tom Jones
Tom Jones Jun 28, 2020 2:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Delta neutral puts, while expensive insurance at these vols, are your best option if you do not want to liqidate your holdings. I am using Oct SPY puts at the moment.
Erjai Pacanza
Erjai Pacanza Jun 28, 2020 2:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buy shares while it cheap. Don't be late because they never wait...
Tom Jones
Tom Jones Jun 28, 2020 2:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
“Cheap” based on what future earnings data or other fundamentals? Forward P/Es are a complete unknown right now. You are wishing and hoping, and should be buying delta neutral puts on your entire portfolio.
Erjai Pacanza
Erjai Pacanza Jun 28, 2020 2:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I have shares in Delta Airlines already and some others US stocks too. It doesn't show in my portfolio here because I am using my Revolut account which doesn't reflect here.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's xhaszzx.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email
We have a special offer for you