As the new Coronavirus cases continue to rise in the US, the stock market dropped on Thursday, reversing its bullish trend in the past few weeks. With the possibility of a second lockdown and a sluggish economy, fear of further economic slowdown led the stock market to decline broadly. Investors are now weighing the recent bullish recovery of the stock market against the risk of a second lockdown. The S&P 500 is down 0.56% and the Dow is down 1.39%. With its heavy focus on tech stocks, the Nasdaq is up 0.53% on the day thanks to the rally in the technology sector.
Economic Data
The Unemployment Insurance Weekly Claims Report shows that 1.3 million people have applied for unemployment insurance in the past week. While this number came below the expected 1.38 million claims, the data is showing that the Coronavirus’s impact on the labor market is long-lasting and the recovery will be slow and choppy.
Looking ahead, tomorrow’s PPI data for June will help investors understand the inflationary pressure in the economy. The current consensus for June PPI is 0.4%.
FANG Stocks
The decline of the broader market did not dampen the rally of FANG stocks today. As investors’ favorites, FANG stocks are all in the green today with Facebook (FB) up 0.38%, Amazon (AMZN) up 3.29%, Netflix (NFLX) up 0.99%, and Alphabet (GOOGL) up 1%. Despite the market weakness, technology stocks remain attractive to investors as valuations continue to grow.
Bitcoin Price
As investors are offloading risky assets, Bitcoin today is testing its new $9,200 support level after declining 2.24% on the day. Bitcoin’s price has been range-bound after it recovered from the March low. Currently, the resistance level for the cryptocurrency is around $9,800 with a $9,200 support. In the near-term, the fear of a second lockdown could put more downward pressure on Bitcoin as investors flee to safe-haven assets.
Commodities and Treasuries
Commodities are broadly declining with Crude Oil Futures down 3.42%. Gold and silver declined modestly to $1,808 and $19 respectively. As investors are seeking safe-haven assets, treasuries rallied today with the 30-year bond yield tightened to 1.317% and the 10-year note yield tightened to 0.605%.
