Stock indexes had their best day in over a month on Monday with the Dow Jones Industrial Average closing 911.95 points higher. Both the Dow and S&P 500 saw their largest daily gains since April 6th as news of a potential coronavirus vaccine lifted market sentiment and all 3 major indexes accelerated their gains into yesterday’s close.
After biotech giant Moderna reported “positive” early-stage results for a developing Covid-19 vaccine, the Dow surged nearly 700 points at yesterday’s opening bell. While the idea of a vaccine is hopeful, some analysts wonder if the market’s reaction is overly optimistic.
“I’d say the data they released today looks fairly promising… In terms of whether this indeed translates into a game-changing vaccine that protects all of us from Covid, I think that remains an open question,” reported Vincent Chen, Senior Analyst at Bernstein Research.
Also buoying markets Monday were comments made by Fed Chair Jerome Powell over the weekend. On CBS’ 60 Minutes, Powell relayed the message that the Fed is ready and willing to assist the economy further:
“We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have.”
Further fueling bullish sentiment this week is the gradual reopening of the majority of US states, including 75% of California. Investors are eager to see how quickly markets recover once paused industries get back up to speed.
Here’s a look at markets this morning:
- Micro E-mini Dow Futures (MYM) -0.26%
- Micro E-mini S&P 500 Futures (MES) 0.08%
- Micro E-mini Nasdaq Futures (MNQ) 0.76%
- Micro E-mini Russell Futures (M2K) -0.18%
The chart above, created 100% FREE using NinjaTrader, displays price action in Micro E-mini Dow futures since the start of 2020. Since breaking back above the 50-day simple moving average (yellow line), price has since remained above the benchmark SMA.
Traders should keep risk management top of mind when trading unpredictable markets and take appropriate measures to protect investment capital.