Oil Price Downside Continues Following The Historic Move On Monday
WTI May 2020 contract has made its way to history books by falling way below the zero mark. While the trading has shifted to June 2020 contract, the storage problem did not disappear, and oil is finding itself under pressure once again.
Currently, the June 2020 WTI oil contract is down more than 20% in one day. Not surprisingly, the collapse on the oil price front negatively impacts the U.S. equity market.
S&P 500 futures are losing about 2% in premarket trading and are set to continue yesterday’s downside move. It remains to be seen whether the panic in the oil market will continue but it is guaranteed to put pressure on oil-related equities.
Waiting For Existing Home Sales Data
In addition to oil price dynamics, traders and investors will have a chance to evaluate Existing Home Sales for March. Analyst expect that Existing Home Sales contracted by 8.1% due to virus containment measures.
In all likelihood, the data for April will look much worse since people were not able to visit homes on sale due to lockdown measures. It remains to be seen whether the market will react negatively to the Existing Home Sales report since it looks like it is still focused on the positive impact of monetary stimulus measures.
Will Big Tech Support The Market?
The big tech companies have fared much better than S&P 500 during the current crisis. Amazon is trading near all-time highs and its shares up up roughly 30% year-to-date. Netflix is also close to all-time highs, up 35% year-to-date.
Other major tech companies have also done well during the rebound from March lows. At this point, they are leading the market, and any signs of weakness at big tech may signal that the current phase of the market rebound is over.
This tech rally will soon get tested by earnings reports since Netflix will report its results on April 21, after the market close. Judging by the recent price action in Netflix shares, the market’s expectations are high.
Netflix report will set the market mood ahead of other big tech reports which are expected to be released during the next week, so it’s certainly a report to keep an eye on.
This article was originally posted on FX Empire
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