If not quite as lively as at the start of the day, the Western indices nevertheless remained in a (naively) optimistic mood on Monday, setting aside some truly terrifying covid-19 stats in favour of an inchoate shift in sentiment.
There was, admittedly, some data to back up the session’s gains – though they came after the fact, justifying the muscular growth in hindsight.
The final Markit services PMI out of the US came in at 47.9, ahead of the initial 46.7 estimate and the forecast 47.0 revision. The ISM services PMI reading, meanwhile, blasted past the expected 50.0 – which would’ve indicated stagnation – to hit 57.1, a level last seen a year and a half ago.
As mentioned, this merely helped back up gains investors had already enacted, the Dow Jones climbing around 390 points after the bell. That is, however, lower than the 550 point push forecast by the futures, the index perhaps unable to ignore all of the weekend’s headlines out of Texas, Florida and the USA as a whole.
Over in Europe there was a marked deceleration as the session wet on, even if the region’s indices were still healthily in the green. The DAX and CAC moved in tandem, from their initial 2.4% surge to a more measured 1.3% increase.
The FTSE didn’t lose as much ground as its Eurozone, partially because the UK construction PMI smashed estimates, at 55.3 for June against May’s 28.9. A 1.8% increase kept the index above 6250, but short of the 6300 mark it flirted with early on.
Tuesday is lacking the same kind of data as Monday, meaning the markets are likely going to weather the next round of rough covid-19 news reports sans protection.
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