Asian stocks were poised for a muted start to July after the strongest quarterly rally since 2009, with investors assessing better-than-estimated U.S. economic data amid concern over new coronavirus cases and fragile trade relations with China.
Futures edged up in Japan and dipped in Australia, with Hong Kong closed for a holiday. The S&P 500 extended its second-quarter rally to 20% as a report showed consumer confidence posted its biggest increase since 2011. After the close of regular trading, FedEx Corp. soared as the economic bellwether used an efficiency drive and a surge in health-equipment deliveries to shore up earnings. Treasuries and the dollar fell. Gold traded near $1,800 an ounce.
Accelerating virus infections are threatening to set back reopenings and stall the economic recovery. New cases could rise to 100,000 a day if behaviors don’t change, infectious-disease expert Anthony Fauci said. Federal Reserve Chairman Jerome Powell stressed to Congress Tuesday that getting the coronavirus under control was vital as the U.S. economy rebounds. After massive monetary and fiscal policy stimulus, signs that the crisis may linger longer could increase pressure for more aid.
“The downside has become more limited given how many investors missed the rebound, how many remain bearish and how much cash has been sitting on the sidelines,” wrote Esty Dwek, head of global market strategy for Natixis Investment Managers. “Coupled with abundant stimulus measures and liquidity, corrections are likely to be bought. That said, we remain prudent and believe it is too early to add a lot of risk to portfolios.”
41,556 in U.S.Most new cases today
-8% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.076 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
-2.3% Global GDP Tracker (annualized), May