New Trade for June 30th 2020

Futures are flat this morning as investors await developments while some states extend their outbreak containment efforts.  

Many will be tuning in this afternoon as Federal Reserve chair, Jerome Powell and Treasury Secretary Steve Mnuchin appear before the House Financial Services Committee.  They are likely to field questions on the Fed’s efforts to help big companies fund themselves.  

In May the Fed began to actually intervene in the market by purchasing exchange-traded funds.

Earlier this month the Fed began directly buying bonds that had already been issued. 

Just yesterday the Fed announced its primary market corporate credit program is up and running.  The Fed’s announcement called it a “funding backstop” that will support market liquidity and “the availability of credit for large employers”. The program has been criticized by Republicans and Democrats.  

We could see volatility today as the markets process the days unfolding.  

Yesterday Goldman Sachs double upgraded one company from “Sell” to “Buy.”.  Indicating room for upward momentum for Southwest Airlines Co. (LUV) with a boost in their price target from $35 to $47.  

According to Goldman Sachs analyst Catherine O’Brien the Southwest’s domestic network and “industry leading” balance sheet will drive a faster post-COVID recovery path versus its peers.