Global Stocks Advance as Investors Assess Pace of Economic Recovery
June 05 2020 - 3:59AM
Dow Jones News
By Joanne Chiu and Avantika Chilkoti
International markets and U.S. stock futures rose, as investors
continued to assess the pace of economic recovery.
The Stoxx Europe 600 benchmark ticked up 1% early Friday. In
Asia, the Shanghai Composite gained 0.4%, Hong Kong's Hang Seng
benchmark rose 1.4% and South Korea's Kospi rallied 1.4% too.
Stock futures tied to the S&P 500 gained 0.9% ahead of the
opening bell in New York.
On Thursday, the S&P 500 broke a four-session winning streak
as disappointing trade and job data showed the coronavirus
pandemic's continued toll on the economy.
Equity markets and the broader economy are disconnected, said
Daryl Liew, chief investment officer at REYL Singapore.
The recent stock-market surge was partly driven by massive
stimulus, plus optimism over "the loosening of restrictions across
the world and the expectations that we could see a V-shaped
recovery," he said.
"However, we haven't really seen that in the broader economy
yet," Mr. Liew added. He said if business activity doesn't rebound
by the third quarter, "governments might have to do more because
otherwise you're going to see a flood of bankruptcies and
insolvencies."
Mr. Liew said he was holding more cash after reducing his
holdings of shares because of uncertainties including potential new
waves of coronavirus infections in some countries, and escalating
U.S.-China tension ahead of the U.S. presidential election in
November.
Lewis Wan, chief investment officer at Pride Investments Group,
said he was cautious on equities following a global rebound. In
dollar terms, the MSCI All Country World Index had jumped 38% as of
Thursday, compared with its low on March 23, according to
FactSet.
"We're probably going to see more volatility in equities until
there's more certainty over the development of vaccines," and the
U.S.-China relationship stabilizes, he said. Mr. Wan said any
resurgence in coronavirus infections could damage fragile investor
confidence.
The dollar continued to weaken, with the WSJ Dollar Index, which
measures the U.S. currency against 16 others, declining 0.3% to
90.98. It hasn't settled below 91 since early March.
Write to Joanne Chiu at joanne.chiu@wsj.com and Avantika
Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
June 05, 2020 03:44 ET (07:44 GMT)
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