- S&P 500 Futures stay mildly bid above 3,100.
- Hopes of further stimulus from the US, receding virus numbers from China favor the risk-off mood.
- Sino-American tension, grim comments from World Bank leader seems largely ignored.
- Preliminary PMIs will join qualitative factors to direct near-term trading sentiment.
S&P 500 Futures print 0.33% gains while flashing 3,120 as a quote when the market’s in Tokyo open for trading on Tuesday. The risk barometer extends the previous day’s gains amid expectations of further efforts by the US policymakers to propel the markets. Also supporting the optimism could be the latest softening of the coronavirus (COVID-19) figures from China. It’s worth mentioning that US President Donald Trump’s step back from sanction on China, due to the human rights violation in Xinjiang, have also played positively for the risk-tone sentiment on Monday.
The US Senate Democrats roll out a $1.5 trillion infrastructure plan to help the world’s largest economy overcome the pandemic. The news offered help to the risks while adding to the previously upbeat market mood. Furthermore, the recently released update from Gilead suggests that the drug maker targets provide remdesivir supplies for two million COVID-19 patients by the year-end. Given the much-championed status of remdesivir, signals to increase support suggest stronger recovery from the deadly disease, which in turn favors the market’s optimism.
On the contrary, the Trump administration’s addition of four other Chinese media to the list placed near the status of embassies challenge the risk-on sentiment. Also doubting the present positivity could be grim comments from the World Bank President David R. Malpass. Additionally, Reuters poll suggesting that the US GDP will contract 34.8% in Q2 2020 also flash red signals to the market players.
Not only S&P 500 Futures but Japan’s Nikkei 225 also portrays the present optimism as it gains 0.90% to 22,660 as we write. Further, the US 10-year Treasury yields are also on the front foot around 0.712%, up 0.8 basis points, to keep the trading sentiment high.
Preliminary readings of the PMI data for the key global economies will entertain the markets on Tuesday. Though, this won’t hurt the importance of Sino-American headlines and the virus updates.
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