Stocks stable after recent gains
World shares paused on Monday as investors turned cautious after a 42% surge since March, as economies continued to struggle with the effects of the coronavirus pandemic.
Europe’s blue-chip stock index opened 0.5% lower after its best weekly gain in more than eight years. The index was dragged down by healthcare and tech stocks, which were resilient throughout the coronavirus crisis.
U. S. S& P 500 inched 0.1% lower, giving up most of the gains made earlier in the day. Asia shares rose in a catch-up rally following Friday’s U. S. jobs data, which showed a surprising recovery, raising hopes of a quicker global economic revival from the coronavirus pandemic.
Gains in Asia were capped as a Chinese trade data published on Sunday showed exports contracted in May as global lockdowns continued to weaken demand. A bigger-than-expected fall in imports pointed to mounting pressure on manufacturers as world growth stalled.
The MSCI all-country world stocks index, which covers 49 markets around the world, is now 7% away from a record high. Wall Street’s fear gauge remained pinned below 30 points in June on encouraging economic data and central bank stimulus. The U. S. Labor Department’s closely watched employment report showed an unexpected drop in the jobless rate to 13.3% last month from 14.7% in April, a post-World War Two high. The data raised hopes of a quick economic recovery as governments worldwide ease social curbs aimed at stemming the virus.
The jobs data also pushed up U. S. bond yields, with the 10- year Treasuries yield rising as high as 0.959% on Friday, a level not seen since mid- March. It last stood at 0.929%.
Hopes of a quick recovery in the U. S. could be quashed by mounting wave of protests demanding police reform after the killing of a black man in Minneapolis.
Brent crude climbed 1.5% to $ 42.93 per barrel. U. S. West Texas Intermediate crude rose 1.3% to $40.08 a barrel
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.