Traders Pause For Breath After Stellar Session
Fiona Cincotta July 7, 2020 7:46 AM
After a stellar rally in the previous session, which saw the Nasdaq reach a new all time high, the S&P close higher for a fifth straight session and the FTSE book 2% gains, investors are pausing for breath on Tuesday.
After a stellar rally in the previous session, which saw the Nasdaq reach a new all time high, the S&P close higher for a fifth straight session and the FTSE book a 2% gains, investors are pausing for breath on Tuesday. Expect in China that is, where the state talking up the importance of fostering a healthy bull run in the markets is ensuring that investors are ploughing in a for a 6th straight session, bringing gains in the Shanghai composite this month to 13%.
US ISM non-manufacturing data also boosted spirits in the previous session. The ISM index shot up to 57.1 in June, well ahead of the 50 level forecast and a significant improvement on the 45.5 recorded in the previous month. The rebound in the US’s dominant service sector boosted optimism that a V-shaped recovery was still a possibility. This does of course depend of the ability of authorities in the US to bring coronavirus numbers under control.
The RBA held interest rates at 0.25% as expected, as soaring job advertisements and retail sales indicate that the economy is recovering. RBA Governor Dr Philip Lowe declared that the worse of the global contraction is over. However, fears of spiralling cases in Australia’s second largest city highlights the struggles that lie ahead. News that Victoria and New South Wales, the nations most populous and economically powerful states will be closing their borders and that Melbourne will be going into lock down for 6 weeks, dragged the Australian Dollar off RBA inspired highs.
Big names reporting
There is little on the UK economic calendar to keep traders entertained, but this is more than made for by a slew of companies reporting including JD Sports, Halfords and Whitbread. Boohoo is also expected to remain under the spotlight after diving 23% in the previous session on accusations of slave labour, human trafficking and unsafe working practices in sweat shops during the coronavirus crisis.
Attention will also turn to Rishi Sunak who, tomorrow is expected to announce a relief package to fight the coronavirus crisis in a mini-Budget.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.