Saturday, 4 July 2020

Markets mixed, global COVID-19 tally passes 11 million

Markets were mixed on Friday.

Asian markets rose. The Nikkei 225 rose 0.7 percent and the Shanghai Composite jumped 2.0 percent.

However, the STOXX Europe 600 fell 0.8 percent.

US markets were closed for a holiday.

Asian markets were boosted by a report showing that the China Caixin/Markit services PMI rose from 55.0 in May to 58.4 in June, the highest reading since April 2010.

However, the continuing rise in COVID-19 cases kept gains in check, with European stocks in particular losing ground as the session wore on.

Reuters reported that global COVID-19 cases exceeded 11 million on Friday, with 520,000 deaths linked to the disease.

The daily US tally of cases stood at 53,483 late on Friday, below the previous day’s record 55,405, but Alabama and six other states reported record increases in coronavirus cases.

Friday, 3 July 2020

US jobs jump but so do COVID-19 cases

Markets rose on Thursday.

The S&P 500 rose 0.5 percent, the STOXX Europe 600 surged 2.0 percent and the Shanghai Composite jumped 2.1 percent.

Markets were buoyed by a report showing that the US economy added back 4.8 million jobs in June.

However, the continuing rise in COVID-19 cases tempered gains.

“Of course, we now know that reopening plans have been changed, with many states and cities reversing course,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

A Reuters tally put the number of new US COVID-19 cases on Thursday at 55,000, the largest daily increase any country has ever reported.

Thursday, 2 July 2020

Markets rise on economic rebound

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.5 percent and the STOXX Europe 600 rose 0.2 percent.

Earlier in Asia, the Nikkei 225 fell 0.8 percent but the Shanghai Composite rose 1.4 percent.

The Institute of Supply Management said its US manufacturing index rose to 52.6 in June from 43.1 in May.

Manufacturing purchasing managers indices elsewhere also showed improvements.

However, dampening sentiment is the continuing rise in COVID-19 infections.

Reuters reported that the number of infections in the US rose by over 48,000 on Wednesday, the biggest daily increase since the pandemic started. California rolled back the reopening of its economy on Wednesday, banning indoor restaurant dining in much of the state, closing bars and stepping up enforcement of social distancing and other measures.

Jim Baird, chief investment officer for Plante Moran Financial Advisors, said that while the “rebound clearly underway creates reason for hope; the ongoing health risk provides reason for caution”.

Wednesday, 1 July 2020

Markets rise as economic data surpass expectations

Markets rose on Tuesday.

The S&P 500 rose 1.5 percent, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 1.3 percent.

Better-than-expected economic data helped boost markets on Tuesday.

In the US, the Conference Board’s consumer confidence index rose to 98.1 in June from 85.9 in May.

In China, the official manufacturing PMI rose to 50.9 in June from 50.6 in May.

“We’ve seen a good sweep of data, macro data in particular, over the past few weeks coming out of the US, the euro zone and China and I think this Chinese data just reiterates the fact that we’re seeing a faster than expected improvement from a macro perspective,” said Cedric Chehab, head of country risk and global strategy at Fitch Solutions.

Markets rose even as Dr Anthony Fauci, the top US epidemiologist, told a Senate committee on Tuesday that the daily COVID-19 case-load could reach 100,000 from the current 40,000 unless Americans wear masks and recommit to social distancing.

Chehab warned that the continuing rise in infections and further lockdowns could lead to “a much larger correction in equity markets”.

Tuesday, 30 June 2020

US stocks jump, “worst yet to come” for COVID-19

Markets were mixed on Monday.

Early in the day, Asian markets fell, with the Nikkei 225 tumbling 2.3 percent.

However, markets turned up later in the day. The STOXX Europe 600 rose 0.4 percent and the S&P 500 jumped 1.5 percent.

Stocks rose in the US and Europe despite COVID-19 cases worldwide passing 10 million on Sunday.

“If things get really bad, the Fed will step in with additional monetary easing and basically reach into their bag of tricks to do whatever they need to support the market,” said Sam Stovall, chief investment strategist at CFRA Research.

Still, Federal Reserve chairman Jerome Powell said on Monday that “the path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus”.

And at the moment, success in containing the virus appears to be not at hand.

“This is really the beginning,” said Dr Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention, on Monday of the recent surge in cases in the US.

“Although many countries have made some progress, globally, the pandemic is actually speeding up,” said Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, on Monday. “The worst is yet to come.”

Monday, 29 June 2020

As COVID-19 cases rise, markets look for government support

Stocks fell last week, with the S&P 500 declining 2.9 percent.

Investors became concerned as the number of COVID-19 cases continued to climb in the US and many other countries.

By Sunday, the global number of infections had exceeded 10 million while the death toll had reached half a million.

In the US, California on Sunday ordered some bars to close, the first major rollback of efforts to reopen the economy in the most populous US state. This followed similar moves in Texas and Florida on Friday.

David Russell, vice president of market intelligence with TradeStation, said that things look "worrisome".

"There will be a lot of difficulty predicting what earnings are going to be like with a disruption of this magnitude," said Russell.

However, some remain optimistic.

"Markets are clearly responding to the significant stimulus in the US and throughout the world," said Kent Insley, chief investment officer with Tiedemann Advisors. "Stocks still look more attractive over the long term compared to bonds."

"The government is providing so much support, so I'd be surprised if the market touches the March lows again," said Ted Swimmer, head of capital markets with Citizens Bank.

Sam Hendel, president of Levin Easterly Partners, said that while he is worried about heavily indebted energy firms and struggling travel and leisure companies, others like tech, consumer staples and health care have the "ballast to withstand an economic contraction".