The Dow Jones index rose by more than 900 points in the futures (CFD) market as the market reacted to news that Coronavirus cases are starting to drop. The market also reacted to information that cases in the United States were likely to peak this week. Today, the US has confirmed more than 337k cases and more than 9,000 deaths.
In New York, the current epicentre of Coronavirus cases in the US, the number of deaths declined to 594 on Sunday from 630 on Saturday. Another catalyst could be the impasse in the energy market where Russia and Saudi Arabia are said to be inching to a deal. In fact, shares of Exxon and Chevron have surged by more than 2% in the premarket. Saudi and Russia could be under pressure since Trump has threatened to impose tariffs on their oil.
The market also reacted to a letter sent by Jamie Dimon, JP Morgan’s CEO. In the letter to shareholders, he said that he anticipated the US economy to go through a deep recession. He also anticipated that the country would likely go through a banking stress similar to what happened in the past financial crisis. Still, he said that he expected the economy to bounce back. The market also reacted to a statement by Bill Ackman, who recently made $2.6 billion from a $27 million investment as the markets collapsed.
I am beginning to get optimistic. Cases appear to be peaking in NY. Almost the entire country is in shutdown. Hydroxychloriquine and antibiotics appear to help. There is increasing evidence that the asymptomatic infection rate could be as much as 50X higher than expected.
The Dow Jones Index CFDs rose to an intraday high of $21,930. On the hourly chart, the index is above the 100-day and 28-day exponential moving averages. The index is also attempting to retest the previous resistance of $22,600, which is now a possibility since it moved past the rejection zone at $21,400.