Global stocks rise on better economic data as U.S. coronavirus cases rise

NEW YORK, USA – European and United States stocks rallied on Tuesday, June 23, as data boosted hopes of a quick economic recovery and investors continued to shrug off increased coronavirus cases in many American states.

Private sector economic activity in the eurozone and Britain remained in contraction in June, but the rates of decline slowed considerably compared with the worst of the coronavirus lockdown, IHS Markit said on Tuesday.

Jessica Hinds, European economist at independent analysts Capital Economics, said the survey “suggests that while the GDP (gross domestic product) outturn will undoubtedly be dreadful, it will not be as catastrophically bad as we had feared.”

In the US, new home sales jumped 16.6% in May above April to a seasonally adjusted annualized rate of 676,000, according to the Census Bureau.

“Pent-up demand ahead of the virus outbreak and households’ shifting preference for more space as well as lower mortgage rates are likely boosting sales,” said Rubeela Farooqi of High Frequency Economics.

The main European markets gained more than 1%, while Wall Street stocks also powered higher, lifting the Nasdaq to its second straight record.

US in ‘critical’ phase

Investors largely overlooked big increases in coronavirus counts in several US states, including in Texas, Oklahoma, and South Carolina.

Cases are also increasing in Florida, where Governor Ron DeSantis said bars and restaurants that violate social distancing rules risk losing their liquor licenses, according to local media.

The coming two weeks will be “critical to our ability to address those surgings,” said Anthony Fauci, the nation’s top infectious disease expert.

Last week, Apple announced that it was reclosing 11 stores in 4 states that have seen jumps in COVID-19 cases.

Art Hogan, chief market strategist at National Securities, said the market is “fragile,” with investors watching if more companies follow Apple and close down again. 

“If in fact we start to hear more steps backward, the market has not priced that in,” he said. 

Markets also shrugged off comments from White House advisor Peter Navarro casting doubt on the US-China trade agreement.

Navarro, in the course of an interview with Fox News, said the deal was “over” and blamed the coronavirus outbreak in the US on China, amplifying a grievance that Trump himself has championed.

The remarks rattled global markets and prompted a quick sell-off.

But Trump on Twitter said subsequently that the agreement is “fully intact,” reviving the market. – Rappler.com