Wall street has registered mixed sign in a festive day on many European exchanges and after the historic production cut agreed by the OPEC and its allies. Investors continue to discount all news related to the coronavirus crisis, which continues to dominate current news. The positive closure of Nasdaq has been led by values like Netflix (+ 7%), whose business is fueled by pandemic and confinement.
Beyond the raw materials market, it should be remembered that a good part of the profits recorded by Wall street last week they took place thanks to the advances against the virus and the new stimulus package of the Fed.
Anthony Fauci, director of NIAID (National Institute of Allergy and Infectious Diseases), said this Sunday that the outbreak is easing in the country and they are already moderately optimistic. Fauci also took the opportunity to warn that the economy it will not return to its previous state so easily once the alarm state has been lifted.
Confirmed infections in the US are close to 559,000, more than any other country in the world. Of all of them, 190,000 are concentrated in the state of New York. The death toll across the country exceeds 22,800. Donald trump has criticized the US press as "false news" for its belated and chaotic performance in containing the Covid-19.
On the other hand, this Monday one of the most popular measures of the Trump Administration has entered into force to face the crisis and cushion its impact on the economy of families: $ 1,200 checks for those who have declared a maximum income of $ 75,000 in 2019 and 2018.
In any case, the Dow Jones it rebounded almost 13% last week and the S&P 500 advanced 12%, so they have reduced their annual decline considerably. The Dow and S&P 500 'just' lose 18% and 14%, respectively, and the Nasdaq it falls 9% so far in 2020.
The group of countries known as OPEC + agreed to reduce production in 9.7 million barrels per day, the largest production cut in history. President Donald Trump tweeted that the deal "will save hundreds of thousands of energy jobs in the United States," adding that it will be "great for everyone." The oil West texas falls 0.4% to $ 22.40, having discounted this cut in previous days.
Goldman Sachs believes that oil prices will continue to fall in the coming weeks since the cut agreement is "historical but insufficient". In his opinion, this pact is unlikely to offset the drop in demand caused by the coronavirus.
In addition, its equity analysts have changed their minds and are now more positive. After anticipating in mid-March that they did not rule out additional falls of the S&P 500 up to 2,000 points, now their central scenario is that the March lows (2,191 points) are the floor of the current bear market.
In other markets, the euro depreciates 0.2% and changes to $ 1.0912, while the profitability of 10-year American bond slightly up to 0.75%. And the VIX volatility index up 3%, up to 43 points.
Within the business front, entities such as Bank of America, JP Morgan and Johnson & Johnson release their results this week. Finally, beyond last week's rally, the big indices remain red from their February highs.
WALL STREET TECHNICAL ANALYSIS
On a technical level, the Dow Jones accumulates a rebound close to 30% from the March lows and the S&P 500, the world's leading index of 25%. And on the other side of the Atlantic, it is said that when the indexes bounce above 20% from lows, it is because we are at the start of a ‘bull market’.
"The problem is that we still no figure back of any kind and experience has shown us in previous crises that it is normal for us to attend a relapse towards the lows. And that's where we have the key, "he says. José María Rodríguez, analyst at Bolsamanía.
"The only thing that somehow makes me doubt the possibility of going back to the lows is that many analysts expect this relapse, and we already know that by the Theory of the contrary opinion, the market is specialized in doing the opposite of what the great majority thinks. For now and as a snack we will see if the S&P 500 is able to clearly recover the MM200 weekly"adds this expert
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