In one of those sessions that seems to fly in the face of the most recent string of headlines, the Western markets rallied hard on Tuesday.
Flip-flopping between being the market’s worst nightmare and its white knight, Donald Trump donned the latter outfit on Monday and Tuesday, lifting indices higher first with an executive order for covid-19 relief, and then the claim he is ‘seriously’ considering a capital gains tax cut.
Add onto that the ongoing negotiations regarding a second stimulus package from Congress, and investors were able to look beyond the US-China tensions that had caused a fair few jitters in the past week or so.
Climbing another 330 points, the Dow Jones smashed past 28100 for the first time since late-February. If it can keep this momentum up, the Dow could well return to its 29500-pushing all-time highs before August is over.
Bathing in the green glow of American trading – the S&P 500 is also nearing its record peak – the European indices also moved sharply higher. The DAX rose 1.8% to 12900, while the CAC surged 2.3% as it crossed 5000.
The FTSE was up 1.3%, hitting 6125. That is well off its midday highs, however, when the UK index briefly crossed 6200 for the first time in a fortnight. Given the wobbles caused by the Q2 GDP readings out of Germany and the US, it will be interesting to see how the FTSE fares on Thursday, when confirmation of a potential 21% contraction in the second quarter arrives.
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