Rishi Sunak’s summer statement didn’t end up doing much for the FTSE, nor did a positive open for the Dow Jones.
The mini-budget – which took a Groupon-approach to stimulus in places, offering diners £10 off eating out from Monday to Wednesday in August – wasn’t robust enough to distract European investors from the continued acceleration of global covid-19 cases, the return to lockdown in Melbourne, and what this will all mean for the pace of any economic recovery.
The FTSE was down 0.5%, worse off than it was just before the Chancellor’s announcement, while the DAX and CAC dropped 0.7% and 1.1% respectively.
Yet, in a Trumpian display of ignorance-cum-optimism, the Dow Jones still climbed 130 points after the bell, despite the US being the epicentre of the market’s coronavirus concerns. That increase pushed the index back above 26030, recovering a chunk of yesterday’s large losses.
Perhaps the best indicator of the market’s underlying sentiment was gold’s journey to an 8-year high of $1826 per ounce, less than $100 away from 2011’s all-time peak. The commodity has been on the up-and-up since late March, and has built a head of steam in the last month or so. The global indices may regularly be trying to put on a happy face, but the safe haven’s gains suggest a lot of anxiety remains.
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