US Stocks Futures Rebound
US stocks futures rebounded after Wall Street recorded declines previously. The COVID-19 outbreak continues to alarm investors on concerns about the stock market and the economy in general.
Investors struggled after the big plunge on Wall Street. On Tuesday, US stocks futures fluctuated while European stocks dropped. Global markets were volatile as the dollar jumped and Treasuries retreated with gold.
S&P500 (SPX) futures went up 3.1% and the index closed 12% lower on Monday. Dow futures climbed more than 500 points or 2.7% following its worst one-day point drop. Moreover, Nasdaq futures went up 3.4% after plummeting on Monday.
In the wake of the biggest sell-off, shares went on to swing between gains and losses. New stress emerged in short-term funding markets as the premium for getting dollars against the euro was at its widest.
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US Stocks Futures Surged
The greenback dropped against almost all its major peers. The yield on Treasuries climbed after plunging almost a quarter percentage point on Monday.
US stocks slipped on Monday after President Donald Trump warned of a possible recession, due the economic disruption from COVID-19.
In other stock market news, the Stoxx Europe 600 Index jumped from a big gain to big loss. Asian Stocks suffered the same volatility.
Eleanor Creagh, market strategist at Saxo Capital Markets, said a bear market does not preclude rallies. The biggest rallies can be in bear markets. Erratic swings are exacerbated by the present high-volatility regime and strained liquidity conditions, she said.
With VIX still remaining significantly above the long-term equilibrium, alarm bells are still sounding. In stock trading, traders should be wary of relief rallies, she added.
The Coming of the Dawn
COVID-19 outbreak has resulted in massive volatility on Wall Street. US stock futures whipsawed while the dollar jumped.
However, the US stocks futures recent rebound does not prove that markets are turning to a corner. According to Jeffrey Halley, senior Market Analyst for Asia Pacific at Oanda, it looks like a bear market rebounce. It doesn’t look like the coming of the dawn.
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