Active Stocks: Like the rest of the market SPDR S&P 500 ETF (SPY) is making some gains pre-market. This index that tracks the S&P 500 is up by 0.74% at the time of writing, and has recovered some of the losses it incurred on Friday. The current gains follow some hope that the U. S and China could return to the negotiating table. According to Bloomberg, President Trump has stated that China is ready to restart talks. This comes days after China’s top negotiator called for calm in the ongoing trade war that escalated last week.
Nonetheless, things remain volatile. This is not the first time that the U.S and China have announced a return to the negotiating table, only for things to go south. This pattern is quite evident in the volatility of SPY pre-market. While it is up by 0.74% at the moment, it was up by over 1.5% earlier in the day. These fluctuations are an indicator that the market is still pricing in the current news, in anticipation of what might come up next from the U.S-China trade war. According to Hao Hong, the head of research and chief strategist at Bocom International, the markets are starting to price in the worst-case scenario of the trade war.
In the day, the key factor that could move the SPY is any Trump comments at the G-7. If he makes any comments that point to an improvement in the trade issue with China, an ETF like SPY that tracks the S&P 500 could record gains as well.
Gold is also an important barometer to keep an eye on in the day. It is a reliable measure of uncertainty in the global economy. If gold gains in the day, it would be an indicator of increased uncertainty, and possibly a flight to safety by investors, away from equities.