Investors are weighing an improvement in economic data against a continued increase in cases. Following the stronger-than-forecast U.S. pending home sales figures Monday, China Tuesday reported improving purchasing-manager indexes for both manufacturing and services.
The MSCI All Country World Index is up about 18% this quarter, the biggest advance in 11 years — on the heels of the worst quarter since 2008. The rebound comes even as deaths from the virus surpass 500,000 and confirmed cases exceed 10 million, with the World Health Organization warning the worst is yet to come.
“It’s not clear what trajectory coronavirus is heading,” Tom Lee, co-founder and head of research at Fundstrat Global Advisors, said on Bloomberg TV. “But I also think because we’re into quarter-end, there’s been some re-balancing. So I’m kind of in the camp that any weakness is short-lived. I would think July is going to be a strong month for stocks.”
Meanwhile, U.S. Commerce Secretary Wilbur Ross said in a statement that regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, were suspended. Ross pointed to China’s imposition of new security measures on Hong Kong and risks surrounding U.S. technology. China’s top legislative body unanimously voted to pass Hong Kong’s national security legislation, Now TV reported.
Here are some key events coming up:
- Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin testify before the House Financial Services Committee on Tuesday.
- The monthly U.S. jobs report will be released on Thursday.
These are some of the main moves in markets:
- S&P 500 futures rose 0.2% as of 11:32 a.m. in Tokyo. The S&P 500 Index rose 1.5%.
- Topix index rose 1.2%.
- Australia’s S&P/ASX 200 Index climbed 1.3%.
- South Korea’s Kospi index rose 1.3%.
- Hong Kong’s Hang Seng Index rose 0.8%.
- Shanghai Composite Index rose 0.4%.
- The yen was little changed at 107.70 per dollar.
- The offshore yuan traded at 7.0667 per dollar.
- The euro was at $1.1244.
- Bloomberg Dollar Spot Index was flat.
- The yield on 10-year Treasuries was little changed 0.63%.
- Australia’s 10-year bond yield fell one basis point to 0.87%.
- West Texas Intermediate crude fell 0.8% to $39.39 a barrel after a 3% gain.
- Gold was flat at $1,771 an ounce.