Sometimes, the best trade is no trade.
Dow futures are down 870 points at the open, with the NASDAQ pointing to a loss of 178. The S&P 500 is set to open down 83 points. All thanks to coronavirus “second wave” concerns. In fact, just days after reopening, Texas has seen three consecutive days of record-breaking COVID-19 hospitalizations. On top of that, nine California counties just reported an uptick in cases or hospitalizations. Florida is seeing a new surge of cases, too.
If we begin to see a resurgence of cases, there’s fear the U.S. economy will be forced to shut down again. It’s part of the reason airline, cruise, and retail stocks are pulling back today.
“Up until yesterday financial markets didn’t appear overly concerned about the prospect of a second wave,” said Michael Hewson, chief market analyst at CMC Markets UK, as quoted by MarketWatch. “Prospects, appear to have concentrated minds in the wake of recent gains, and sending the usual suspects of travel, as well as oil and gas stocks sharply lower”
Not helping, the Federal Reserve has no confidence in the U.S. economy right now.
The Fed now expects a 6.5% contraction this year, with the unemployment rate ending at 9.3% — which is above estimates for 4.1%.
We’ve already highlighted a few ways to trade gold this week with the madness.
Today, we’re suggesting you stay on the sidelines with markets set to unravel.