US stocks buck weak European lead, ASX futures up

By Simon Herrmann. Published at Jul 15, 2020, in Market Wrap

ASX futures have lifted ahead of trade as global equity markets rebounded late on Tuesday, buoyed by a surge in cyclical stocks on Wall Street. The Dow Jones jumped over 2% after Monday’s slump, while safe-haven gold prices cemented gains above $1,800 an ounce.

Technology shares initially sold off getting slammed during European trade, while energy, industrial and financial stocks rose. However, the Nasdaq played catch up and ended the day firmly higher as well as investors remain confident about the prospects of the world economy.

ASX futures trade 28 points higher at 8am in Sydney pointing to a day in the black for the local share market.

Yesterday the ASX fell along with most Asian markets after a late-afternoon fall on Wall Street on Monday. The ASX 200 ended the session 0.6% or 36.4 points lower to close at 5,941.1 points. The Small Ordinaries Index of mid-caps eased 1.3% to 2,591.3 points.

European stocks fall, US data mixed

The S&P 500 gained 1.34%, and the Nasdaq Composite added 0.94%, despite early losses. Core inflation remains well under the Federal Reserve’s target of 2%, sending Treasury yields lower.

Despite geopolitical tensions and California’s economy shutting down once again, cyclical stocks rallied.

Earlier in the day, European shares fell across the board after a decline in Asian markets. The broad STOXX Europe 600 index fell 0.84% weighed down by the German DAX, which fell 0.8% in Frankfurt. The FTSE 100 staged a late rally and managed to just finish in the black, up 0.06%.

In Asia, the Hang Seng fell and so did the Nikkei, down 1.14% and 0.87% respectively. Chinese shares drifted lower as well on the back of the tremendous stock market rally. The Shanghai Composite closed down 0.83%.

The MSCI World Index rose 0.53% to 543.54, driven by a rebounding Wall Street.

On the commodities front, oil futures rebounded after an early session slump. Brent crude settled up 18 cents at U$42.90 a barrel. US crude rose 19 cents to settle at U$40.29 a barrel.

Gold prices consolidated over US$1,800 an ounce as the gold rally appears to be far from over.

Iron ore traded +1.3% higher to $US112.48 a tonne.

Political tensions remain elevated between Washington and Beijing after the United States rejected China’s claims to offshore resources in most of the South China Sea. Adding salt to the wound, British Prime Minister Boris Johnson ordered equipment of the world’s biggest telecoms equipment maker, Huawei, to be purged completely from Britain’s 5G network by 2027.

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