European stock markets dipped on Tuesday morning, following strong gains for equities globally in the previous trading session led by China.
The FTSE 100 (^FTSE) fell 0.4% at the open in London, while the DAX (^GDAXI) dropped 0.7% in Frankfurt, and the CAC 40 (^FCHI) dropped 0.5% in Paris.
Action was mixed in Asia overnight. Japan’s Nikkei (^N225) fell 0.4% and the Hong Kong Hang Seng index (^HSI) shed 0.6%. On mainland China, the Shanghai Composite (000001.SS) rose 0.6% and the Shenzen Component (399001.SZ) rallied 2%.
Futures were pointing to a lower open on Wall Street. S&P 500 futures (ES=F) were down 0.4%, Dow Jones futures (YM=F) were 0.6% lower, and Nasdaq futures (NQ=F) dipped 0.1%.
The pullback for equities comes after a buoyant session on Monday. Chinese equities markets surged after the government-owned Securities Times urged the public to invest in stocks. That sparked a global rally for equities.
“Many investors are comparing the rally in the Chinese stocks with 2015 bubble but the reality is that the current stock rally is different because investors are not taking the same kind of leverage as they did back in 2015,” said Naeem Aslam, chief market analyst at Avatrade.
“Basically, investors are happy to back riskier assets because the economic data is confirming that the economic recovery from coronavirus is taking place.”
Sentiment was helped by much better-than-expected US manufacturing data and hints from Senate Majority Leader Mitch McConnell that more fiscal stimulus could be on the way.
Deutsche Bank strategist Jim Reid wrote in a note to clients on Tuesday morning: “The senator had been fairly circumspect on wanting to see whether the economy needed further action before increasing federal spending, but signaled yesterday that it is indeed needed, saying ‘This is not over. We are seeing a resurgence in a lot of states… I think the country needs one last boost.’”
The Nasdaq closed at an all-time high on Monday, prompting a tweet from US president Donald Trump.
Avatrade’s Aslam said the mild sell-off on Tuesday was likely just a “pause”.
“There is still a lot of optimism among investors,” he said in an email.
READ MORE: UK chancellor to launch £3bn green jobs recovery package
Others were more circumspect, pointing to the continued rise in COVID-19 infections globally. There have now been 11.6 million confirmed cases globally, according to John Hopkins University, with 2.9 million of those cases in the US. Over 538,000 people have died from the virus globally. The 7-day daily average of new cases remains near record levels.
“Rising infection rates — especially if accompanied by a failure to enact more fiscal stimulus — could finally have a more-than-fleeting impact on stocks — at least US stocks — especially as earnings reports roll in,” said Kristina Hooper, chief global market strategist at Invesco.
“While the stock market has decoupled from the economy in recent months, there is the potential that earnings season could reunite them, albeit temporarily, and make stocks more sensitive to rising infection rates as well as a possible lack of fiscal stimulus. And so we will, of course, be following earnings season closely.”
"stock" - Google News
July 07, 2020 at 02:44PM
https://ift.tt/2BOT1qu
Stocks 'pause' after Nasdaq hits new high - Yahoo Money
"stock" - Google News
https://ift.tt/37YwtPr
https://ift.tt/3b37xGF
Bagikan Berita Ini
0 Response to "Stocks 'pause' after Nasdaq hits new high - Yahoo Money"
Post a Comment