NEW YORK: Global equity benchmarks were little changed on Thursday as investors gauged the potential economic impact of a surge in US coronavirus cases, while perceived safe-haven assets, including US Treasuries and the dollar, edged higher.
In the United States, Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday and Australia posted its biggest daily rise in two months.
The governors of New York, New Jersey and Connecticut ordered travelers from eight other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions.
Disney has delayed the re-opening of theme parks and resorts in California, and Texas is facing a “massive outbreak” and considering new localised restrictions, its governor said.
After a white-hot few months in which world stock markets rebounded nearly 40 per cent, nervousness about the impact of Covid-19 was rising again.
“There is a little bit of reality bites coming,” said Damian Rooney, senior institutional salesman at stockbroker Argonaut in Perth. “I don’t think there was a particular straw that broke the camel’s back, but people are a little bit twitchy.”
MSCI’s gauge of stocks across the globe gained 0.03pc following modest gains in Europe led by Germany, which reported rising consumer confidence.
In midday trading on Wall Street, the Dow Jones Industrial Average rose 85.99 points, or 0.34pc, to 25,531.93, the S&P 500 gained 8.97 points, or 0.29pc, to 3,059.3 and the Nasdaq Composite added 47.77 points, or 0.48pc, to 9,956.94.
US banking stocks rose after regulators eased restrictions on cash levels and made it easier for institutions to make larger investments in venture capital funds.
Weekly jobless claims data showed weak demand is forcing US employers to lay off workers, even as businesses reopen. Claims totaled a seasonally adjusted 1.480 million for the week ended June 20, and although down from 1.540m the prior week, it was higher than the 1.3 million forecast in a Reuters poll.
“During the swift rebound since the March lows, equity markets may have gotten a little ahead of themselves,” wealth manager DWS said in a quarterly Chief Investment Officer report.
Concerns about economic damage from the coronavirus pandemic helped bolster the dollar and government bonds.
Published in Dawn, June 26th, 2020