- Global stocks rose on Tuesday as investor sentiment was propped up by a relaxation in coronavirus lockdowns across the world and on news of a new vaccine for the virus.
- US futures point to gains of more than 2% as traders return to work after the long Memorial Day weekend, while major indexes in Europe and Asia also bounced on the day.
- The World Health Organisation has temporarily halted trials for hydroxychloroquine amid safety concerns.
- US-China tensions continue to escalate after White House national security adviser attacked the world’s second-largest economy for engaging in “espionage” to develop vaccine technology.
- Novavax said it is launching its first human clinical trials of a coronavirus vaccine.
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Global stocks marched higher Tuesday as coronavirus lockdowns continue to be eased around the world, and major economies show tentative signs of recovery, while investors shrug off mounting tensions between the US and China.
Futures for the S&P 500 increased as much as 2.2% during the European morning, while in Asian trade Hong Kong’s Hang Seng rose 1.8%, and the pan-European Stoxx 50 rose 0.8%.
On Monday, Japan lifted its two-month long state of emergency after a marked fall in new coronavirus cases in its capital city Tokyo and other hard-hit provinces, one of the most significant examples of lockdown easing yet. The move ended some curbs on economic activity and triggered a bullish response from investors.
Japan’s benchmark index, the Nikkei 225, rose 2.5%.
Elsewhere, the UK signalled Monday that it could allow non-essential stores to reopen within weeks, and many US states continued the process of reopening. In the UK economic activity rose to almost 80% of normal two weeks ago, according to a Barclays survey reported by the Financial Times.
Lockdown restrictions in the US seem to be crawling back as senior White House economic adviser Kevin Hassett said on Sunday the country’s “human capital stock” is ready to get back to work.
Sentiment was also boosted by more progress on a potential vaccine for the coronavirus. Biotech firm Novavax announced the start of human trials for its coronavirus vaccine, with preliminary results expected in July.
Meanwhile, US-China tensions continued during the Memorial Day weekend as White House national security adviser Robert O’ Brien publicly remarked on China’s attempt at espionage in “stealing American intellectual property” related to a new vaccine.
In response to this, a China foreign ministry spokesperson tweeted: “Interesting to hear some US official talking about the story of vaccine. Is this the normal logic that if anyone has something better than mine, then it must be stolen from me? Remember, China has 5000 years of history while the US has less than 250.”
Investors, however, seemed more willing to focus on the good news rather than US-China tensions.
Here’s the market roundup as of 10.00 a.m. in London (5:00 a.m. ET):
- Asian indexes rose with China’s Shanghai Composite up 1%, Hong Kong’s Hang Seng up 1.8%, and Japan’s Nikkei up 2.5%.
- European equities rose, with Germany’s DAX up 0.7%, Britain’s FTSE 100 up 1.5%, and the Euro Stoxx 50 up 0.8%.
- US stocks are set to open higher. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq rose between 1.9% and 2.2%.
- Oil prices rose, with West Texas Intermediate up 2.2% at $US33.97, and Brent crude up 1.2% at $US35.94.
- The benchmark 10-year Treasury yield rose to 0.69%.
- Gold fell 0.6% to $US1,725.
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