What will get in the way of market profits? Certainly not bad news on COVID-19, as investors are trying to look at the bright side of these uncertain times.
Take this chart showing how Arizona cases have begun to flatten, by Pantheon Macroeconomics, which expects that since the state responded earlier than most to a renewed sharp increase in cases, other hard-hit states are likely to flatten out in the coming weeks:
Spring today’s conversation from Thomas Lee, Head of Fundstrat Global Advisors, says stock resistance over the past week shows that investors have “been following a more difficult path when it comes to COVID-19.”
In a comment to customers, Lee says “data shows how suddenly hedge funds switched to bearish positioning in June. Combined with high levels of liquid funds, balanced funds have the highest liquid funds (% of assets managed) since 2009. Thus, the fact “it could have been worse” = risk-on. “
That does not mean that there is no “tragedy” taking place in the United States, he said. “But the good news is that every state that is facing an outbreak is really ‘bank correction’, with bars closing over several states with serious outbreaks and reopens paused elsewhere.
“We believe that daily death statistics are the most important metric to look at. And as long as the deaths remain trendy lower / lower and now with states that will see a peak in the next 2-3 weeks, it sure feels like risk-on is meaningful, “Lee said.
In short, Lee says, is that a combination of shares close to their heights and cautious positioning means that investors should hold overweight shares. And while the revenue is about to get going, and they will be “lousy”, with some guidance, it has all been well telegraphed, in his opinion.
Here are the drivers that Lee believes will keep the stock moving up:
No sign of a shift from the positive driving force of the Dow YM00,
and the Nasdaq NQ00,
futures higher, together with European shares SXXP,
In Asia Chinese stock 000300,
increased by 3.4%, which led to gains throughout the region on optimism over the second quarter’s gross domestic product data coming later this week.
BTIG chief strategist Julian Emanuel tells customers on a note that the upcoming revenue season could be a “potential catalyst for performance auditing” on two groups of shares.
These top players – Amazon AMZN,
and mostly technology – up to more than 40% more years to date, may fall on the view nothing they report or say will be “good enough” to sustain profits, Emanuel says.
Conversely, the reporting field for these financial shares and other underperformers – a 30% reduction to date – can be so low that the only way for these shares is up, he says.
the shares rise after the profit when the revenue season for the second quarter starts. Citigroup C,
and Wells Fargo WFC,
report on Tuesday.
and BioNTech BNTX,
stocks are growing after their COVID-19 vaccine candidates have received fast-track designation from the Food and Drug Administration.
Shares for chip manufacturer Maxim Integrated Products MXIM,
climbing on news rival Analog devices ADI,
will buy it in an all-stock deal and shares in the specially acquired Churchill Capital CCXX,
grows on news of a $ 11 billion merger with healthcare provider Multiplan.
China bans Senators Marco Rubio and Ted Cruz for their criticism of the government’s policy towards minority groups and religious people.
The country’s highest testing staff does not fully agree with the infectious disease specialist. Anthony Fauci’s advice to pause reopening in states where cases are growing. Disney DIS,
takes heat to open amusement parks in Florida, breaking the US record with 15,299 new cases on Sunday:
The federal budget will be released later.
A famous Bollywood family has tested positive for COVID-19.
With interrupted fighting, a Greek student spends 48 days cycling home.
Viral video shows maskless British revelers on a Spanish island:
Actor John Travolta says his wife, actor Kelly Preston, has died of cancer:
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