Equity

Stocks: All is Well? Not so Fast

Posted 06/12/2020 8:25AM CTJeff Yasak

Stock futures rallied this morning gaining back some of the gains lost on Thursday, the worst trading day on Wall Street since mid-March.  Thursdays down day, a 7% decline in the Dow, was triggered by increased coronavirus cases around the country and warnings of sustained economic losses caused by the virus shutdowns. The losses came after John Hopkins University released data that showed new coronavirus cases were rising in a handful of states, cases in Arizona have almost doubled since Memorial Day. Even with the huge drop Thursday the market was still 35% above the intraday lows seen on March 23rd. These gains were fueled by industries that would greatly benefit from an economic reopening such as retailers, airlines and vacation-based companies.  

“We had gone straight up more than 30% without a real sell-off, so you’re due for one, and I don’t think it’s the worst thing in the world,” said JJ Kinahan, chief market strategist at TD Ameritrade. “As more states get back, the question becomes: Are they going to ramp up fast enough to please Wall Street? What you’re seeing is it’ll be hard to do that. Some of these stocks may have gotten ahead of their skis. When you see some of the airlines being priced at the levels they were before this all started when they say they’re going to do 60% of their business just doesn’t make sense.”

Support is checking in today at 252500 and 229500 while resistance is showing 284000 and 293000.

E-mini S&P 500 Sep ’20 Daily Chart
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Jeff Yasak

Senior Market Strategist

Since leaving the corporate world in 1995, Jeff has established a name for himself as a trusted financial advisor and trading advocate—leveraging his studies in finance from the University of Wisconsin-Madison and Loyola University, 25+ years of experience, and a passion for the industry to guide both novice and experienced traders in pursuit of achieving their own financial reward. Jeff began his career as a clerk in the S&P 500 pit at the Chicago Mercantile Exchange—fostering a deep interest in the options market that eventually drove him into the retail futures sector where he spent several years as a broker’s assistant before taking on clients of his own. Operating at the intersection of strategy and success, Jeff seeks to establish meaningful relationships with clients—synthesizing financial data and offering timely insight that informs critical decision-making surrounding money management and trading activities. Well-versed in the futures, securities, equities, and indices markets, Jeff is uniquely positioned to direct his clients to success. With a carefully cultivated combination of experience and expertise, he is able to connect with clients to better understand their goals and offer sound financial guidance that delivers notable bottom-line results.

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