Stocks surged forward in the U.S., Europe and Asia on Tuesday due to the new stimulus and a positive outlook about economic recovery. The Stoxx Europe 600 Index rallied by 1.5%, while the S&P 500 Index futures jumped by 0.4%. The MSCI Asia Pacific Index also soared by 0.8%, and the MSCI Emerging Market Index gained 0.9%.
Investors expected a new stimulus from the government. Such sentiment pushed the Stoxx 600, hitting a 12-week high in Europe. Angela Merkel, the German Chancellor, mulled over throwing out a second stimulus package to aid the country’s economy.
Meanwhile, Deutsche Lufthansa AG climbed up after the airline overcame most of the barriers to getting a 9 billion euro bailout from the government.
In Asia, Tokyo equity benchmarks hit high. Oil skyrocketed as traders thought about a potential extension of the production curbs by OPEC+. Unfortunately, though, treasuries fell.
Does the current unrest threaten the stocks in the U.S.?
The U.S. stocks ended in the green after President Donald Trump’s statement. There are protests and unrest in U.S. states and cities due to the death of an unarmed black man, George Floyd. He died after the police brutalized him.
Trump declared that he would deploy large numbers of troops if states and cities don’t act to contain violence from the protests. There have been several violent demonstrations across U.S. cities so far over the killing of Floyd. However, following Trump’s promise, contracts for the S&P 500 climbed higher after the initial downfall.
Still, the situation concerns traders. Some of them also worry about the tense relationship between the U.S. and China. It may jeopardize the trade deal.
Despite these discords, stocks are skyrocketing to three-month highs, as the authorities are lifting lockdowns and businesses are reopening worldwide. Manufacturing gauges show that economies are stabilizing after coronavirus shutdowns.
The main focus remains on the longer-term prospects of the easing of lockdowns around the world – stated Michael Hewson, an analyst at CMC Markets. But he also added that if the violence on U.S. streets continues much longer, U.S. investors might have to face a different kind of lockdown, imposed by the National Guard.
