Dow Jones futures move lower as coronavirus stock market rally shows concern about unrest

The Dow Jones futures are trading lower today after the dow scored another stellar rally yesterday. Investors are still largely immune to the on-going riots and looting on the streets of the U.S. Although some concerns about riots begin to surface today.  Traders are more enthusiastic about reopening the economy. The unprecedented stimulus levels of stimulus and hope of more possible support are fuelling the coronavirus stock market rally.

The European Central bank is expected to announce another bazooka today in terms of extra stimulus but there is no hope of interest rates moving any lower as they are already sitting below zero. The US ADP economic data confirmed that the worst may be over for the US labour market and Americans may have good days ahead of them if Trump can unite the nation. It is the weekly jobless claims data that it is going to inspire the dow jones stock price today.

 

Dow Jones Futures Today

The Dow Jones futures are trading flat today but the Dow chart below shows that the index is not only holding to its momentum but it is also in the catchup game.

The Dow Jones stocks have been lagging in terms of coronavirus stock market rally because the Nasdaq index has been the strongest out of the three major indices, the S&P500, the Dow and the Nasdaq. The S&P500 stocks hold the second position in terms of Coronavirus rally and the Dow index is the weakest. The chart below shows the relative percentage performance for djia and S&P500 futures.

 

Stock Market Rally

The stock market rally continued yesterday as continued to bet on the reopening of the U.S. economy. The Dow Jones industrial average gained 527 points and the Dow Index closed with a gain of 2.05%. Wall Street also pushed the S&P500 stocks higher by 1.36%. The NASDAQ index challenged the all-time high yesterday despite civil unrest chaos on the streets of the U.S. The tech-savvy index, the NASDAQ closed jumped 0.49%.

 

Trump News: 1807 Insurrection Act and Chinese Airline

In Trump news, Donald Trump, the U.S. president, was blasted by his ex-employee over his aggressive strategy to use the U.S. military to crush protests. Ex-Defense Secretary, Jim Mattis used some strong language yesterday and said Trump has mocked the system and Constitution. He was displeased with the president’s approach of using the photo op and his approach to unite the nation. The unrest in the country began only after the death of an unarmed back man, Geroge Floyd under police custody.

Given the fact that Trump was his boss, and the EX-Defense Secretary does not seem to respect the nature of president’s leadership, and none of the other governors doesn’t seem to be on board of using the military to quell the civil unrest, Trump is likely to face more pressure from the use of the 1807 Insurrection Act that White House officials mentioned yesterday.

Shooting, looting scenes continued on the streets of the US while stock futures have paid little to no attention to this so far. Americans do not seem to care about curfew as Brooklyn protestors marched towards Manhattan as the sunset yesterday. Police prohibited their entry while Pentagon continued to push troops on the streets of Washington.

Trump barred Chinese airlines to enter into the U.S. and anchored further tensions with China. Although, the response was mainly a retaliation action of the U.S. airlines requests—which was ignored--to resume flights to China. 

 

Jobless Claims

Ahead of the US NFP data--due tomorrow, the weekly jobless claims economic number is the last piece of information that is going to provide more information about the health of the US labor force. The weekly jobless claims number already shows that the worst may be behind, and Trump is likely to take the credit of this tomorrow when the US NFP number echos the same message. The forecast for the unemployment claims data is for 1820K while the previous reading was 2123K.  

 

ECB Meeting and Stimulus

Today is the European Central Bank (ECB) meeting day. The ECB is expected to expand its stimulus program with an additional 500 billion euros of asset purchases in its meeting later today. The ECB isn’t expected to change its ultra-low interest level but anything less than the widely anticipated stimulus package could set the shockwaves in the European stock market. The ECB’s president Christine Lagarde needs to make sure that her tone and words are crafted carefully so that she can calm the peripheral bond markets.

The coronavirus lockdown measures in the European countries are being eased off but the situation is far from being normal and it is likely to remain that way for some period of time. Therefore, the ECB doesn’t have the choice to delay the stimulus package any further.