- The Dow’s recovery come to an end on Friday as the United States becomes the most-infected country in the world.
- Now that the coronavirus stimulus package has been absorbed, the Dow has little in the way of the catalyst to fuel a sustained rally.
- Profit-taking will likely erase most of this week’s gains.
The stock market made its way out of bear territory this week after three consecutive days of gains. But Dow Futures pointed to a lower open on Friday as a worrying spike in U.S. coronavirus cases threatened to erase this week’s historic gains.
Coronavirus Worries Keep a Lid on the Dow’s Rally
The U.S. overtook China to report the most confirmed coronavirus cases in the world late Thursday. Donald Trump brushed the label off, claiming it can be attributed to the U.S. improved testing.
I think it’s a tribute to the testing, we’re testing tremendous numbers of people.
Cases in the U.S. are only expected to rise as unrestricted movement between cities make it difficult to contain the virus.
While the government’s $2 trillion stimulus package eased fears of a total economic meltdown, it did little to calm worries about an unmitigated coronavirus outbreak across the U.S.
Investors were spooked by the marked rise in cases Friday morning which sent dow futures 375 points lower and suggested U.S. financial markets would finish the week on a low note.
Profit-Taking To Push the Dow Lower
The majority of Americans believe the stock market hasn’t bottomed yet, an Allianz Quarterly Market Perceptions study shows. That suggests profit-taking is on the horizon as investors try to book gains ahead of the disastrous economic data that’s certain to come in the weeks ahead.
Gregory Faranello of AmeriVet Securities said as much Thursday following a…