Arguably against the odds the European markets got off to a strong start of Monday, choosing to ignore the many issues that arose over the weekend.
There’s a list the length of your arm why investors should be feeling edge. Congress is yet to agree on a fresh stimulus plan. The number of covid-19 cases in the United States has now crossed 5 million. The UK just saw its daily number of fresh cases surpass 1000 for the first time since June, ahead of the likely confirmation of a 21% economic contraction in Q2 on Thursday.
And, most importantly, Donald Trump followed up his TikTok and WeChat bans with sanctions on 11 Chinese and Hong Kong officials, while having US health chief Alex Azar praise Taiwan’s democracy and response to the pandemic in a move designed to rile up Beijing. This as China starts to aggressively enforce the new national security laws in Hong Kong, including the arrest of pro-democracy property tycoon Jimmy Lai. Plenty, then, for US trade representative Robert Lighthizer and Chinese Vice Premier Liu He to discuss in a tinderbox trade talks videoconference on Saturday.
Setting all of that aside, the markets decided to instead celebrate the latest payroll tax-cutting executive orders from Trump, designed to bypass the blockade in Congress regarding coronavirus relief – despite critics of the actions claiming, in the words of Joe Biden, that it is a ‘reckless war on Social Security’, and may not actually provide much benefit to American citizens.
Climbing 1.1%, the FTSE once again neared 6100, currently hovering at 6090. The DAX, meanwhile, added 0.6% as it crossed 12730, with the CAC up 0.9% at 4925.
As for the Dow Jones, it is looking to add 100 points after the bell, taking it to a 2-month high of 27530. If it can squeeze out a few points more, it’ll hit levels last seen at the end of February.
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