Daily Outlook

Stocks Add to Rally, Shrug Off Infection Concerns

Stocks pushed higher in Europe along with U.S. equity futures as investors looked past a worrying increase in coronavirus cases to government and monetary stimulus. The dollar slipped.

In the wake of Tuesday’s global rally, gains in real-estate and banking shares brought fresh momentum to the Stoxx Europe 600 Index. S&P 500 futures swung from modest declines to gains, building on the index’s increase from Tuesday following data showing a surprising rebound in U.S. retail sales. Treasuries were mixed.

For now, investors are reflecting optimism as they hunt for fresh catalysts after Federal Reserve Chairman Jerome Powell said Tuesday the U.S. economy has a long way to go before it reverses the substantial damage done by the pandemic. Meanwhile, second-wave and geopolitical concerns provide cause for caution.

“Powell’s remarks reinforce our view that the Fed’s priorities are shifting from emergency actions aimed at preventing a market melt-down to long-lasting actions to support the fastest possible recovery in the real economy,” Chapard said.

China is escalating containment measures in Beijing including canceling flights as it grapples with how to stem a growing outbreak, while Florida reported record new cases. Meanwhile, Chinese and Indian troops are engaged on their border, while North Korean plans for troop deployments rattled sentiment in Seoul.

Elsewhere, Asian equities saw a mostly lackluster session except for shares in South Korea, which were volatile in the wake of rising tensions with North Korea. The won currency slid against the dollar. Crude oil advanced.

Stocks

Futures on the S&P 500 Index increased 0.8% as of 9:32 a.m. London time.Nasdaq 100 Index futures climbed 0.7%.The Stoxx Europe 600 Index gained 0.9%.The MSCI Emerging Market Index rose 0.4%.

Currencies

The Bloomberg Dollar Spot Index declined 0.2%.The euro climbed 0.1% to $1.1272.The British pound was little changed at $1.2572.The Japanese yen weakened 0.1% to 107.41 per dollar.The South Korean Won weakened 0.6% to 1,213.97 per dollar.

Bonds

The yield on 10-year Treasuries climbed one basis point to 0.76%.The yield on two-year Treasuries fell less than one basis point to 0.20%.Germany’s 10-year yield increased six basis points to -0.36%.Britain’s 10-year yield rose one basis point to 0.22%.

Commodities

Brent crude climbed 1.1% to $41.40 a barrel.Gold weakened 0.2% to $1,723.48 an ounce. LME zinc gained 1.2% to $2,020 per metric ton.

Stocks Add to Rally, Shrug Off Infection Concerns, Bloomberg, Jun 17

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