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Good morning, well the second COVID-19 wave has reared its ugly head overnight with the first US states to reopen from lockdown reporting a surge in hospitalizations including Texas, Florida and Arizona.

Now that saw investors smash the risk off button with extreme light seeing US indices carve out their worst day of losses since the 16th of March.

The S&P500 lost 5.9% and the Dow Jones lost 6.9% to 1,800 points.

The benchmarks did however manage to hold onto their gain of 37% from the bear market bottom.

Now over in Europe a bit of a similar story, massive overnight falls of about 4%.

Unilever on the other hand, the biggest producer of soap in the world, rose 0.5% after announcing it would merge its UK and Dutch structure into one single parent UK company, to really future-proof the business.

Now on the commodity front, the oil prices fell 8% on second wave concerns, falling to $36.22, while the gold price held its near one-week high but it lost about $5 falling to $1,735.

Now all in all, the Aussie share market is tipped to see some heavy selling today with the futures suggesting a fall of 3%.

So what to watch today, well keep your eye on the US futures as the Dow Jones is already eyeing a 100 point recovery overnight.

But if the futures do continue to gain momentum, you’d expect as the equities not to fall as hard today.

However keep an eye on cyclicals like Energy, Real Estate and Financials, to be likely sold down the most today, along with airliners, as that’s what happened overnight and indeed this happens in a risk-off environment.

Also keep an eye on Staples which are somewhat expected to hold up in comparison.

Now over the next couple of days you’d also expect the iron ore majors to rally up again, like Fortescue Metals (ASX:FMG), BHP(ASX:BHP) and Rio Tinto (ASX:RIO) to be upgraded as the iron ore price has been upgraded by Citi, increasing their price target of the commodity by 7%,

with Brazil’s supply been ground to a halt.

Now to some local trading ideas, well firstly it looks like investors have been lining up to buy two Aussie short ASX ETFs before the open, lining up to buy (ASX:BEAR) & (ASX:BBOZ).

Which are likely to generate a decent return if the Aussie market does fall 3% as the futures indicate.

Now secondly, car dealership company A.P Eagers (ASX:APE) was upgraded again by Bell Potter with new vehicle sales in June expected to surge back to the same levels as last year, given all these are less likely to jump on public transport and more inclined to drive to work now.

But what it expects there to be pent up demand in April and May and expects a surge in sales this month and then a drop-off in July.

Bell Potter reiterated A.P Eagers as a buy increasing its target to $8.

Now JP Morgan also reckons A.P Eagers is worth $8 in a year.

Now thirdly Qantas (ASX:QAN) they had their price target increased by one of the major brokers with UBS saying the stock is worth $5.50, given that capacity is tipped to return locally to 40% of pre-COVID-19 levels.

Now lastly the testing laboratory business HRL (ASX:HRL) as well they’re growing their suite of services and they released stronger than expected earnings levels for the year.

Now Bell Potter maintained its buy rating of the stock increasing HRL’s price target to 15 cents, expecting 43% capital growth.

I’m Jessica Amir with Bell Direct, happy trading and stay safe.