TODAY ON WALL STREET: A sense of relief as H1 ends

06/30/2020 | 08:59 am

The surge of coronavirus cases in several U.S. states and the risks this pose to recovery weighed on U.S. stock futures today. Futures tied to the S&P 500 is down 0.2%. However, the first half of 2020 is in its final hours, and Wall Street is back to pre-crisis levels.

The past months have been a roller-coaster ride, and the consequences of this period are not yet fully measurable. At the economic level, the damage is already visible. This does not mean that they are necessarily well understood for the future. On financial markets, the balance sheet varies greatly from one stock exchange to another, but it is safe to say that the vast majority of investors are relieved.

The new coronavirus outbreaks are the subject of much discussion. Will countries have to close down to deal with it? Experts don't think so, as the cost would be too great. Therefore, economic continuity will be given priority.

In the coming weeks, there will be a lot of talk about business results and forecasts before the summer break, and then attention will focus on Sino-US relations and the countdown to the US presidential election. With, of course, Covid-19 as a backdrop.

China seems to be the world’s black sheep right now. After Donald Trump, Europe recently expressed reservations about Chinese investments, and Taiwan is trying to do the same. Anxious to preserve its technological know-how, especially in semiconductors, the country wants to strengthen the procedures for examining foreign investments. It is also considering banning certain executives, managers and engineers (positioned in technology sectors) from visiting China for a certain period of time after losing their jobs.

On the Indian side, border tensions seem to have left a bitter taste. India has implemented unofficial restrictions on Chinese imports, and yesterday, it decided to ban 59 Chinese applications (including TikTok).

Meanwhile... On the Chinese side, everything seems to be going well. This morning, the China Federation of Logistics and Purchasing released the PMIss, which continue their gradual rise, with a manufacturing index at 50.9 (versus 50.6 the previous month) and a non-manufacturing index at 54.4 (versus 53.6 in May).

Many indicators today, with June preliminary inflation for the euro zone, the Chicago PMI, the Conference Board's Consumer Confidence Index and several speeches by central bankers, including Jerome Powell.

Romain Fournier
MarketScreener.com 2020
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