Stock markets rallied worldwide due to the positive signs of the global economy’s recovery. The new stimulus also boosted futures despite the increasing social unrest in America.
The S&P 500 Index futures surged forward by 0.4%, while the Stoxx Europe 600 Index climbed up by 1.5%. The MSCI Asia Pacific Index also gained 0.8%, and the MSCI Emerging Market Index soared by 0.9%.
Contracts for the S&P 500 edged higher after the initial downfall. President Donald Trump promised to deploy large numbers of troops if states and cities don’t act to contain violence from protests over police brutality. His statement caused stocks to rise.
Meanwhile, hopes over the stimulus boosted the Stoxx 600 to a 12-week high in Europe. And Deutsche Lufthansa AG jumped up after the airline overcame most of the barriers to getting a 9 billion euro bailout from authorities. German Chancellor, Angela Merkel, contemplated throwing out a second stimulus package to aid the country’s economy.
Furthermore, Tokyo equity benchmarks outperformed in Asia. Oil soared as investors thought about a potential extension of production curbs by OPEC+. However, Treasuries lowered, but the pound gained due to the positive news in trade negotiations between the EU and Britain.
How do current events influence the market?
Stocks are hitting three-month highs as governments are lifting lockdowns and businesses are reopening around the globe. According to manufacturing gauges, economies are stabilizing after coronavirus shutdowns.
However, some investors worry about tense U.S.-China relations, which may jeopardize the trade deal between the two countries. Furthermore, there have been several violent demonstrations across U.S. cities over the killing of an unarmed black man, George Floyd, which causes traders further stress.
Michael Hewson, an analyst at CMC Markets, stated that the main focus stays on the longer-term prospects of the easing of lockdowns around the world. However, if the violence on U.S. streets continues for much longer, U.S. investors might have to face a lockdown of a different kind, imposed by the National Guard.