Stocks up as investors weigh data on economy, new contagions

Jun 23, 2020

Global shares are up as investors look past reports of surging coronavirus cases in many countries and focus on evidence of an economic recovery

TOKYO (AP) — Global shares rose Tuesday as investors appeared to look past reports of surging coronavirus cases in the U.S. and other countries to focus on evidence of economic recovery.

European shares advanced after a measure of economic activity in the eurozone, the purchasing managers' index, rose significantly in June from the month before. The index was just shy of the level that indicates the economy is growing again after a devastating plunge in the spring.

France's CAC 40 gained 1.6% to 5,027, while Germany's DAX rallied 2.6% to 12,584. Britain's FTSE 100 gained 1.3% to 6,235.

U.S. shares were set for gains, with Dow futures up 1% and S&P 500 futures up 0.9%.

Asian markets initially opened lower, spooked by reported comments by White House trade adviser Peter Navarro suggesting the U.S. trade deal with China was in trouble.

However, Navarro said his comments were taken out of context, and President Donald Trump tweeted that the agreement with China, the basis for a truce in a tariff war over technology and other problems, is still on. Trump tweeted: “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!”

Comments by either side suggesting progress or problems with the trade agreement have added to the uncertainties prevailing in the midst of the pandemic, pushing and pulling at share prices.

After some early losses, markets pressed higher.

Japan's benchmark Nikkei 225 added 0.5% to finish at 22,549.05. Hong Kong's Hang Seng index jumped 1.6% to 24,907.34 and South Korea's Kospi climbed 0.2% to 2,131.24. Australia's S&P/ASX 200 edged up 0.2% to 5,954.40, while the Shanghai Composite gained 0.2 to 2,970.62.

“It’s back to the regular order of business, which is trying to figure out why stocks are so high!" Stephen Innes of AxiCorp said in a commentary. “You can add the resurgence of COVID-19 to the laundry list of things the market doesn’t care about, so it seems.”

Investors are favoring retailers and other companies that are poised to do well now that more businesses have been given the go-ahead to reopen. But traders are also continuing to hedge their bets by snapping up traditionally less risky assets, such as government bonds and gold, which also rose.

On Tuesday, the Commerce Department will serve up new home sales figures for May.

Further updates on the U.S. economy are expected toward the end of this week, when the government will issue data on consumer spending, weekly unemployment aid applications and durable goods orders.

Benchmark U.S. crude oil added 78 cents to $41.51 a barrel. Brent crude, the international standard, rose 86 cents to $43.93 per barrel.

The dollar rose to 107.06 Japanese yen from 106.90 yen late Monday. The euro was trading at $1.1297, up from $1.1262.

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