NASDAQ closes at all-time high, but COVID a concern

By Trevor Hoey. Published at Jul 21, 2020, in Market Wrap

While global markets were generally buoyant overnight, the ASX is likely to be influenced by growing coronavirus rates and today’s announcement regarding changes to JobSeeker and JobKeeper by the Australian government.

The ASX SPI200 futures index suggests we are in for a positive day, offsetting yesterday’s fall of 0.5% in the S&P/ASX 200 index.

Energy stocks placed a drag on the market yesterday with the index falling from 6033 points to less than 6000 points midway through the session before recovering to close at 6002 points.

Ahead of the open, the futures index is up 42 points to 6012 points.

24 hours

The Shanghai Composite was the star performer in the Asia-Pacific region yesterday, gaining 100 points or 3.1% to close at 3314 points.

The index has traded erratically in July, surging from about 3000 points to 3450 points early in the month before retracing to approximately 3200 points last week.

Whether yesterday’s rally represents the start of another leg up remains to be seen.

Other indices were relatively flat with the Hang Seng shedding 0.1% to close at 25,058 points and the Nikkei 225 gaining 0.1% as it closed at 22,717 points.

European markets were mixed with the FTSE 100 coming off 29 points or 0.5% to close at 6261 points.

There was much more confidence in mainland Europe with the DAX gaining 1% to 13,046 points.

The CAC 40’s close of 5093 points represented a gain of 0.5%.

The most significant development in the US was the NASDAQ’s 2.5% surge as it gained 264 points to close at 10,767 points, its highest close on record.

Amazon was the big mover, soaring nearly 8% after brokers increased their share price targets to US$3800 per share.

Interestingly, the Dow Jones US Retail Index gained 3.5% to close at a record high, difficult to fathom given increasing unemployment, lower levels of disposable income among consumers and a significant erosion in consumer confidence, economic stability and social equilibrium in the face of ongoing riots.

The Dow was relatively flat, only gaining nine points to close at 26,680 points.

The S&P 500 was perhaps a better measure of broader investor sentiment as it rallied 0.8% to 3251 points.

After dipping early in the day, the Brent Crude Oil Continuous Contract recovered to close at US$43.28 per barrel.

Gold hit an intraday high of US$1823 per ounce, just shy of the long-term high recorded earlier this month.

Iron ore came off 0.7%, closing at US$109.50 per tonne.

There was little movement in base metal prices.

The Australian dollar continued to strengthen against the US dollar, and it is now fetching just above US$0.70, having gained more than 2% in the last three weeks.

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