Morning all.
US futures have recovered their overnight dip and risk sentiment is looking strong at the moment.
I missed a bit of news yesterday that I’ve just seen when catching up on some stories.
US Vice President Mike Pence during an interview stated that the US would see the Coronavirus pandemic largely behind them by Memorial Day. That is May 25th, 4 weeks from now.
Along with talk of more lockdown easing, markets latched onto this and the recent recovery extended. This keeps expectations for a rapid recovery in Q3 in place and even brings the prospect of a stronger end to Q2 into focus if June is relatively normal for the US economy.
I think in the absence of data to the contrary markets could keep embracing these positive forecasts and optimistic timelines but I still wonder how they are going to react if the economy can’t live up to hype.
$OIL prices are probably the only true indicator of what is happening in global economic activity at the moment and the futures curve for Oil has sub $30 prices all the way to April 2021 suggesting a strong demand recovery is certainly not expected in the short-term and if that ends up being a relatively good indicator, the 2020 bounce-back could be more muted that many are expecting.
Lot’s of conflicting data out there so quite difficult to take a strong view at the moment.
Stay safe, thanks for your time.
$SPX500 $DJ30 $NSDQ100
