(01 JULY 2020)DAILY MARKET BRIEF 1:Economic data over rising Covid cases.
The US indices extended their advance, as investors chose to concentrate on improving and mostly better than expected economic data rather than the alarming rise in Covid-19 cases in the US and warnings that the situation may be getting out of control.
The US house price index rose more than expected in May and the consumer confidence printed a significantly better number in June. But the rising uncertainties regarding the pace of business reopening are coupled with an unhealthy rising pattern in new Covid-19 cases in many US states. Therefore, we may see the optimism in recent data hitting back investors in the coming months as the public health recovery doesn’t seem to be on the right path just yet.
Elsewhere, the Australian manufacturing PMI hinted that the economy stepped in the expansion zone with a reading above the 50 mark in June.
In Japan, the Tankan manufacturing index came short of expectations, but the manufacturing PMI beat the forecasts, though remaining near a relatively low 40 mark, suggesting that the activity in Japan continued contracting in June.
The Korean imports and exports both slumped more than 10% in June, but the trade surplus finally came close to a pre-crisis level of 3.67 billion won.
Sentiment in Asian equities was mixed. The Nikkei eased 0.20%, as the ASX (+0.59%), Hang Seng (+0.52%) and Shanghai’s Composite (+0.91%) recorded gains.
