NEW YORK, June 30 — A gauge of stocks across the world rose yesterday, led by a rebound on Wall Street, even as rising Covid-19 cases threaten to stall the recovery of the world’s largest economy.
Contracts to buy US previously owned homes rose by the highest percentage on record in May. But they remained below their February level and were down compared with May 2019, which also kept alive expectations for even more economic stimulus.
Analysts at Morgan Stanley said a further injection of cash was critical to the bank’s thesis for a V-shaped US economic recovery.
“The market believes that the (Federal Reserve) has its back,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“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.”
Confirmed Covid-19 cases worldwide rose past 10 million and deaths surpassed 500,000 on Sunday. The relentless spread of the new coronavirus in the United States, Latin America and elsewhere curbed optimism over the global economy and raised worries that some reopening plans will be delayed.
Boeing shares shot up 14 per cent after 737 MAX certification flights started yesterday and the rally gave life to the Dow industrials, while factory — and materials-heavy sectors of the S&P 500 boosted the benchmark index. Indexes closed the day at or near session highs.
The pan-European STOXX 600 index rose 0.44 per cent and MSCI’s gauge of stocks across the globe gained 0.74 per cent.
Emerging market stocks lost 0.48 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.93 per cent lower, while Japan’s Nikkei futures rose 0.29 per cent.
It is an important week for US data, with the ISM manufacturing index tomorrow and monthly payrolls on Thursday, moved up a day due to observance of the Independence Day holiday on Friday. Fed Chair Jerome Powell is testifying today.
Bill Merz, head of fixed income research at US Bank Wealth Management in Minneapolis, said he expected small changes for long-term yields, noting that Treasuries may be “one of the least-interesting markets for the rest of the year” due to the Fed’s influence on the short end of the curve.
The yield on benchmark 10-year notes was barely changed from late Friday at 0.6381 per cent. The long end of curve edged higher as investors hoped for a stimulus-backed economic rebound. The 30-year bond last fell 12/32 in price to yield 1.3877 per cent, from 1.372 per cent.
In currency markets, sterling fell against both the dollar and euro as investors focused on how Britain’s government will pay for its planned infrastructure push, while Brexit-related risks kept pressure on the pound.
Sterling was last trading at US$1.2292 (RM5.27), down 0.33 per cent on the day after falling nearly 0.7 per cent earlier.
The dollar index rose 0.011 per cent, with the euro up 0.17 per cent to US$1.1236.
The Japanese yen weakened 0.35 per cent versus the greenback at 107.55 per dollar.
US crude recently rose 2.73 per cent to US$39.54 per barrel and Brent was at US$41.55, up 1.29 per cent on the day. — Reuters