News & Analysis

Overnight on Wall Street: Wednesday 01 July 2020

July 1, 2020

By Deepta Bolaky
@DeeptaGOMarkets

Equity Markets

Global stocks were mixed on Tuesday but major equity benchmarks wrapped up a stellar quarterly performance seen in years. Massive fiscal stimulus, ultra-low levels of interest rates, central banks interventions and optimism on the reopenings helped the stock market to rebound as fiercely and aggressively as it initially fell.

World Equity Indices


Source: Bloomberg Terminal

All major US equity benchmarks finished in the positive territory and locked in the best quarter since 1988:

  • Dow Jones Industrial Average added 217 points or 0.9% to 25,813.
  • S&P 500 rose by 47 points or 1.5% to 3,100.
  • Nasdaq Composite added 184 points or 1.9% to 10,059.


Source: Bloomberg Terminal

As we start a new quarter, we see an improvement in fundamentals and hopeful signs of recovery but the rising number of virus cases in certain regions and the risk of a second wave of infection remain the element of caution.

Currency Markets

In the FX space, major currencies were mixed against the US dollar. The greenback struggled to edge higher despite the improvement in the US economic data:

  • Consumer Confidence: The Conference Board Consumer Confidence Index increased in June, after virtually no change in May. The index rose by 12.2 points to 98.1.
  • S&P/Case-Shiller Home Prices Indices: The index posted a 4.0% year-over-year gain, up from 3.9% in the previous month.
  • Chicago Purchasing Managers’ Index: The Index rose to 36.6 in June with business activity picking up as Covid-19 related shutdowns eased somewhat.


Source: Bloomberg Terminal

The British Pound emerged as the best-performing currency despite Brexit-related headlines and lockdown measures for Leicester as virus surges. The Pound rose higher mostly on the back on the overall risk sentiment and a weaker US dollar.

Commodities

Crude oil prices also struggled to edge higher dragged by virus fears and the uncertainty around the demand outlook. The American Petroleum Institute reported a larger-than-expected crude oil stock draw from previous 1.749M to -8.156M in June 26 which provided a boost to crude oil prices. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) are consolidating around $39.67 and $41.15, respectively.

After April’s crash, a combination of production cuts and the reopening of economies helped the WTI futures to post its best quarter in 30 years.

Gold

Gold continues to rally as investors are monitoring the resurgence of virus infections. Gold futures closed above $1,800 an ounce for the first time since 2011.


Source: Bloomberg

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • AiG Performance of Mfg Index, Building Permits and Commonwealth Bank Manufacturing PMI (Australia)
  • Building Permits (New Zealand)
  • Tankan Large Manufacturing Outlook & Index and Tankan Large All Industry Capex (Japan)
  • Caixin Manufacturing PMI (China)
  • Retail Sales, Unemployment Rate, Unemployment Change, and Markit Manufacturing PMI (Germany)
  • Markit Manufacturing PMI and BoE’s Haskel Speech (UK)
  • ADP Employment Change, Markit Manufacturing PMI, ISM Manufacturing PMI, ISM Manufacturing Employment Index, ISM Manufacturing Prices Paid, ISM Manufacturing New Orders Index and FOMC Minutes (US)
Thursday, 02 July 2020 
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
08.6420.680.0291.5020.620
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
1.69405.0360126.0204.892


Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

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