Wall Street opens higher as focus shifts to US earnings


US stocks rose on Monday as traders looked ahead to an important week which sees the start of earnings season on Wall Street and an EU meeting to discuss the bloc’s €750bn recovery fund.

The S&P 500 was up 0.8 per cent at the open, leaving the benchmark index on course to build on last week’s late gains. The tech-heavy Nasdaq continued to extend its all-time high, gaining 1.1 per cent.

The rise followed gains in Europe and the Asia-Pacific region. Europe’s Stoxx 600 rose 0.8 per cent in afternoon trading, helped higher by London’s FTSE 100 adding 1.1 per cent. Japan’s Topix benchmark closed up 2.5 per cent.
Investors welcomed Wall Street’s first major results, with PespiCo shares rising 0.5 per cent at the open after the food and drink company reported revenues that fell less than Wall Street analysts had feared, bolstered by strong sales of snacks.

Overall, S&P 500 companies are expected to report a decline in earnings of 44.6 per cent in the second quarter, in what would be the worst such performance since the 2008-2009 financial crisis, according to data provider FactSet.
European and US equities have struggled to find momentum to continue their rush higher in the past month, as coronavirus cases and deaths continue to blight the American recovery.

Investors were facing “competing elements” as they weighed signs of economic recovery visible in survey data and high-frequency indicators against the spread of the virus through developing markets and some US states, said Shoqat Bunglawala, head of European and Asian portfolio solutions at Goldman Sachs Asset Management.

The asset manager’s portfolio was broadly neutral across risk assets, given that markets were likely to remain rangebound as traders looked ahead to the promise of a recovery next year, Mr Bunglawala said.

Asia-Pacific equities started the week with gains as traders were hopeful that data this week will show a return of Chinese economic growth in the second quarter. China’s CSI 300 of Shanghai- and Shenzhen-listed stocks climbed 2.1 per cent.

Last week, mainland Chinese equities posted their best week in five years as investors piled into a rally bolstered by signs of economic recovery and support from state media. The country’s stock market has risen 18 per cent in 2020, while benchmarks in Europe and the US remain down on the year.

The gains for European and Asian shares on Monday came in spite of concerns that a surge in the number coronavirus cases in many US states could compromise an economic recovery and a move by Beijing to impose sanctions on US officials.

Florida became the first state to record more than 15,000 cases in a single day on Sunday as infections continued to rise across the south of the US — a trend that is forcing the worst-affected states to impose new restrictions.
Evidence of a recovery in China would come at a time when fears of fresh Asia coronavirus outbreaks persist, with Hong Kong experiencing a new wave of cases during the past week. Melbourne, Australia’s second-biggest city, has been put under a fresh six-week lockdown as authorities try to curb a renewed outbreak.

Haven assets remained in demand, as China indicated that it will sanction a group of US politicians in a tit-for-tat move against measures announced by Washington last week over alleged human rights abuses against ethnic minorities in Xinjiang.

The price of gold moved up 0.7 per cent to $1,812 per ounce, after climbing above $1,800 last week for the first time since 2011. Data showed traders poured $40bn into funds backed by gold in the first half of the year.
Oil prices declined, with Brent crude, the international benchmark, dropping 0.7 per cent to $42.92 a barrel.

Whatsapp mobile

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.