• US stocks extended losses
• European indices finished in red
US crude prices continued to plunge on storage concerns. Today WTI crude futures contract for May dropped below zero for the first time in history while the June contract dropped as much as 45% below $ 11.46 a barrel as investors worried that spreading coronavirus pandemic will continue to hurt demand. Analysts estimate that because of the stay-at-home restrictions and business closures due to the pandemic, oil demand have fallen by 30%. Saudi Arabia announced it ready to take further actions together with other major oil producers to achieve oil market stability.
Global equity markets extended yesterday losses amid a slump in oil prices. European leaders are scheduled for a video meeting on Thursday to discuss budgetary measures and work on ways to finance economic recovery from the pandemic. However, financial markets do not expect that final decisions will be made during the meeting. Yesterday Chancellor Angela Merkel said that Germany ready to commit to a bigger EU budget and to the issuance of joint debt via the Commission. European indices finished today’s session lower. DAX 30 dropped 3.9 % lower, CAC 40 % declined 3.8 % and FTSE 100 fell 3.0 %.
Although Donald Trump has assured that the US government will help oil companies, US stock indices are continuing to fall. After the presidential tweet, the market rebounded temporarily, but later sell-off gained momentum. Donald Trump said he will sign an Executive Order to suspend immigration into the United States.
Currently, the main indexes across the Atlantic are trading under pressure. Dow Jones dropped 2.43 %, S&P500 fell 2.85 % and NASDAQ is trading 3.26 % lower. On the earnings front, Coca-Cola earnings came above expectations and Netflix will release results after the market close.
The price of gold dropped more than 1% to around $1,660 per ounce today as demand for the US dollar increased. In normal times gold would rally alongside side other safe heaven assets like the US dollar, the Japanese Yen and the Swiss Franc. However, taking into account the recent events that took place in the markets, it should be assumed that these are not normal times and investors should be prepared for further unexpected market behavior.
Tomorrow investors will be served CPI readings from UK and Canada. In the afternoon US crude oil inventories will be published. On the earnings front AT&T Inc, T-Mobile US Inc., Biogen Inc., Delta Airlines Inc. will report their quarterly results.
Gold has fallen back from its recent multi-year high of $ 1,747 / oz and broke below the supportive trendline which is acting as a resistance now. Today price found some support around $1661.32/oz. If sellers will manage to break belows this level then next support located at $1633.82/oz may come into play. Break above $1700/oz will invalidate the bearish scenario. Source: xStation5The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
