Global Stocks Waver While China Rally Powers Ahead
By Joe Wallace
Global stocks wavered Wednesday, while mainland Chinese shares
extended a winning streak for a seventh consecutive day.
Futures tied to the S&P 500 ticked up 0.3%, signaling that
equity markets could rise at the open after pulling back on worries
that the pace of the economic recovery has slowed. The benchmark
index fell 1.5% Tuesday, its biggest one-day decline since June
Chinese shares resumed their recent spurt, pushing the Shanghai
Composite Index up 1.7%. The index has advanced 8% this week as
small investors bet that a recovering economy will boost profits.
The streak has revived memories of an earlier rally in Chinese
stocks in 2015, which ended in a crash.
U.S. stocks have traded in a narrow range for the past month,
after zooming higher for much of the second quarter. Investors are
weighing stimulus efforts by central banks and governments against
signs that the rebound in U.S. economic growth has lost speed, a
jump in coronavirus cases in parts of the country, and rising
tensions between China and the West.
"I would characterize the stock market as relatively immune to
the [health] crisis," said Gregory Perdon, co-chief investment
officer at Arbuthnot Latham & Co., a U.K. private bank. It is
difficult for stock prices to go down when stimulus measures by the
Federal Reserve and European Central Bank have pinned down bond
yields, he added.
The U.S. reported 60,000 new coronavirus cases Tuesday, a
single-day record, according to data compiled by Johns Hopkins
The main risk markets face is that the U.S. unemployment rate
starts to rise again, after falling to 11.1% in June, according to
"What I'm keenly focused on is how the employment picture, or
the changing employment picture, will play into consumption and how
that feeds into earnings," he said.
Ahead of the opening bell in New York, shares in TechnipFMC rose
more than 9% after the oil-and-gas company said it had signed a
construction contract with a refinery in Egypt.
International stock markets were mixed. Japan's Nikkei 225 Index
was down 0.8%. The Stoxx Europe 600 fell 0.3%, led lower by shares
Nokia shares fell 7.5% after analysts at JPMorgan Chase &
Co. downgraded the telecom-equipment maker's stock, citing signs
that Verizon Communications could buy more kit from Samsung
The yield on 10-year Treasury notes rose to 0.654%, from 0.648%
on Tuesday. Bond yields and prices move in opposite directions.
Oil prices edged up ahead of data from the Energy Department
showing the size of U.S. crude stockpiles. West Texas Intermediate
futures rose 0.2% to $40.70 a barrel after a separate gauge from
the American Petroleum Institute, an industry group, suggested
inventories grew by 2 million barrels last week.
Gold prices rose, extending recent gains driven by low bond
yields and uncertainty about the world economy. New York gold
futures were 0.3% higher at $1,815.50 a troy ounce.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
July 08, 2020 08:17 ET (12:17 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.