Traders work on the floor of the NYSE. Photo: Spencer Platt/Getty Images.

United States equities opened higher Monday following big gains in Asia and Europe and a risk-on bid in currency markets.

Why it matters: Stock markets could continue to rise despite an unprecedented global pandemic, violent protests over police violence in the U.S. not seen since the 1960s, and spiking tensions between the world's two largest economies.

What's happening: "Given everything that happened over the weekend, that’s a pretty bullish open," Max Gokhman, Pacific Life’s head of asset allocation, told Bloomberg of the start to trading in Asian markets.

  • "We’ve had riots that forced many major cities to impose curfews and send in the National Guard. We can reasonably expect that this won’t help the coronavirus curve bend in the right direction."

The big picture: Violent protests have taken place for six straight days in dozens of cities, forcing the closure of some of the largest U.S. retailers, including Target and Apple, right as they were reopening after COVID-19 shutdowns.

  • Amazon announced it would scale back deliveries and shut down delivery stations in cities like Chicago, Los Angeles and Portland.

What they're saying: Billionaire investors and top market analysts at institutions including Goldman Sachs and Bank of America have warned for weeks that the stock market's rally looked overdone and have written down expectations for the rest of the year.

  • Late last week, JPMorgan equity strategist Marko Kolanovic reversed course on his bullish March call, warning that reopening efforts looked insufficient and that the threat of supply chain and international trade breakdowns, primarily between the U.S. and China, "would justify equities trading drastically lower.”

On the technical side: Bespoke Investment Group wrote in a note to clients that just over 74% of stocks in the S&P 500 are now overbought, and that there is not a single oversold stock in the index — the first time this has happened in the history of its database going back to 2007.

One level deeper: Goldman Sachs warns that the S&P's return on equity in the first quarter plunged to "the lowest level since 2017." Further, a 150 basis point decline in margins from the fourth quarter of 2019 to the first quarter of 2020 "was the largest quarterly decline since 1970."

Yes, but: None of that has mattered so far. The S&P 500 broke through 3,000 on Thursday and rose again Friday, up 38% from its March 23 low.

  • "It’s tough to be a bear at the moment and the path of least resistance for risk remains to the upside in my opinion," Chris Weston, head of research at Melbourne brokerage Pepperstone, told Reuters.

Go deeper: The stock market's speculative frenzy

Go deeper

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A makeshift memorial outside the Supreme Court yesterday. Photo: Jose Luis Magana/AFP via Getty Images

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On the table: Adding Supreme Court justices ... eliminating the Senate's 60-vote threshold to end filibusters ... and statehood for D.C. and Puerto Rico. "If he holds a vote in 2020, we pack the court in 2021," Rep. Joe Kennedy III (D-Mass.) tweeted.

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Photo: Samuel Corum/Getty Images

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