US Equities Advanced to Close Out the Best Quarter Since 1998

July 2, 2020
Scott Kingsley

Overnight Asia

Equity futures dropped and Asian stocks traded in a muted fashion at the start of the third quarter, as investors assessed mixed data on the global economy amid concern over the Coronavirus spread and Sino-American tensions. Shares fell in Japan on low volumes, with sentiment capped as confidence among large manufacturers in the country fell to the lowest since 2009. Stocks ticked higher in Shanghai and Sydney, and were little changed in Seoul. Hong Kong is closed for a holiday. S&P 500 futures slid after the gauge rounded out a 20% second-quarter surge with US consumer confidence posting its biggest rise since 2011. European contracts were also lower.

Treasuries ticked lower and the Dollar edged up. Gold was near $1,800 an ounce.

Traders also weighed a new national security law for Hong Kong, where China asserted broad new powers to rein in those who criticise its rule. Hong Kong police made their first arrest on Wednesday less than 24 hours after the new law in the territory. Investors are monitoring accelerating virus infections that threaten to set back re-openings and stall the economic recovery. New cases could rise to 100,000 a day if behaviours don’t change, infectious-disease expert Anthony Fauci said.

Federal Reserve Chairman Jerome Powell stressed to Congress Tuesday that getting the Coronavirus under control was vital as the US economy rebounds.

After the close of regular trading, FedEx Corp. soared as the economic bellwether used an efficiency drive and a surge in health-equipment deliveries to shore up earnings. US equities briefly pared gains Tuesday after the Federal Communications Commission designated Huawei Technologies Co. and ZTE Corp. as national security threats.

Here are some key events coming up:

  • The monthly US jobs report will be released on Thursday

These are some of the main moves in markets:


  • Futures on the S&P 500 fell 0.50% as of 7.01 am in London. The gauge jumped 1.50% on Tuesday
  • Japan’s Topix Index dropped 1.30%
  • Shanghai Composite rose about 0.60%
  • Australia’s S&P/ASX 200 Index added 0.30%
  • South Korea’s Kospi was flat
  • Euro Stoxx 50 futures fell 0.20%


  • The Yen was at 107.62 per Dollar, up 0.30%
  • The offshore Yuan traded at 7.0739 per Dollar
  • The Euro bought $1.1222, down 0.10%


  • The yield on 10-year Treasuries ticked up to 0.67%
  • Australia’s 10-year yield rose six basis points to 0.93%


  • West Texas Intermediate crude added 1.10% to $39.71 a barrel
  • Gold was at $1,784 an ounce

US Market Wrap

US equities advanced to close out the best quarter since 1998, although investor confidence continues to be challenged by rising global virus cases and trade relations with China.


  • S&P 500 up 1.50%
  • Dow Jones Industrial Average added 0.90%
  • Nasdaq Composite gained 1.90%
  • Russell 2000 up 1.40%
  • All 11 main S&P 500 sectors closed higher
  • Energy up 2.20%
  • Utilities up 0.40%
  • 10-year Treasury yield at 0.66%
  • Bloomberg Dollar Spot down 0.20%


  • Virus Update: Anthony Fauci, the US government’s top infectious disease specialist, warned lawmakers that Coronavirus cases could rise to 100,000 a day if behaviors don’t change. The European Union extended a travel ban for Americans, deeming the US response to the outbreak insufficient
  • Federal Reserve Chair Jerome Powell stressed to Congress Tuesday that getting the Coronavirus under control was vital as the US economy rebounds from the sharpest contraction on record
  • Almost 90% of Americans say they are dissatisfied with the state of the country, and their unhappiness is affecting their political decisions four months before the presidential election, a new study from Pew Research Center shows


  • The damage inflicted on the global labor market by the Coronavirus is proving worse than initially estimated and will be impossible to repair in the second half of 2020 even under the most optimistic scenario, according to the International Labour Organization
  • BlackRock Inc.’s Rich Kushel will take charge of about $3.60 trillion in assets, as the world’s largest money manager shuffles its active fund lineup and promotes a potential successor to Chief Executive Officer Larry Fink

On Wednesday:

  • Canada markets closed in observance of Canada Day
  • Weekly MBA Mortgage Applications 7 am
  • June ADP Employment Change 8.15 am
  • June Final Markit US Manufacturing PMI 9.45 am
  • May Construction Spending 10 am
  • June ISM Manufacturing 10 am
  • FOMC Meeting Minutes 2 pm
  • June Vehicle Sales

Source: Sanlam Private Wealth

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