Wall Street climbs on trade reassurances

Tech-heavy Nasdaq on course to hit second straight record high

NEW YORK: Wall Street followed European and Asian stocks higher on Tuesday and longer-term US Treasury yields gained ground after trade deal reassurances and upbeat economic data from the United States and Europe brightened the prospect of a swift economic recovery.

Tech-heavy Nasdaq was on course to post its second straight record high close.

Economic data provided a welcome surprise to the upside with IHS Markit’s “flash” purchasing managers’ index (PMI) of June business activity in the US. A separate report from the US Commerce Department showed sales of new homes jumped by 16.6% in May, far better than the 2.9% consensus.

Late on Monday, President Donald Trump tweeted “The China trade deal is fully intact,” calming markets after White House Adviser Peter Navarro sparked confusion when he called the deal “over”, due in part to lingering anger over the coronavirus outbreak.

“The confirmation from the White House that the China trade deal remains in place gave a lot of confidence to the market,” said Tim Ghriskey, Chief Investment Strategist at Inverness Counsel in New York.

“PMIs overseas were very strong and broad. There’s a lot of pent-up demand, there’s a lot of cash and cash equivalents sloshing around looking for a home.” The Dow Jones Industrial Average rose 112.05 points, or 0.43%, to 26,137.01, the S&P 500 gained 17.94 points, or 0.58%, to 3,135.8 and the Nasdaq Composite added 84.93 points, or 0.84%, to 10,141.41.

IHS Markit’s PMI data for the euro zone also blew past economist projections, climbing out of contraction territory and stoking hopes of a quick, V-shaped recovery.

The pan-European Stoxx 600 index rose 0.83% and MSCI’s gauge of stocks across the globe gained 0.91%.

Published in The Express Tribune, June 24^th, 2020.

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