Miners powered ahead in Tuesday’s session, tracing metal prices higher. The unveiling of a stimulus package to lift domestic demand in China, the world’s biggest consumer of metals is going some way to counter trade war jitters. A package of tax cuts, research spending, special bonds, infrastructure spending and a pledge to use tax policy to stimulate growth shows that the authorities in China are concerned over the impact that the developing trade war will have on growth and are taking measures to counteract a weakening economy.
Miners were also boosted by a rebounding copper price, as supply concerns increase amid a dispute in Chile’s Escondida mine, a major global source of copper.
Stellar earnings season takes Nasdaq to fresh record high
Wall Street was off to stronger start, with the Dow jumping 200 points higher on the open and the Nasdaq soaring 1%, hitting a fresh record high on earnings optimism after Google parent Alphabet smashed expectations.
Alphabet rallied 4.5% after reporting stronger than forecast top line results and an easing of costs, which had been pressurising margins. Alphabet have shown that recent investment has paid off. Facebook also tagged onto the rally, surging 2.1% whilst hitting a fresh all-time high.
Earning season is off to a strong start, of the 21% of S&P firms that have reported, 80.6% has beaten expectations for Q2 earnings, whilst 74% have surpassed expectations on earnings. These are the fundamental figures which are going to keep the equity rally alive given they offer the perfect distraction to trade war headlines. Until those trade war headlines are reflected in the data, these strong fundamentals will keep the bulls in charge.