Adam Vettese, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for July 07, 2020.
European markets have opened softer this morning, potentially locking in profits as coronavirus fears continue to resurface. The FTSE and Dax are down 1% a piece and US futures are pointing towards a 0.5% dip on the open. Stock markets across the world soared on Monday, despite hundreds of thousands of new coronavirus cases being reported globally over the weekend. Investors continued to focus on vaccine hopes and recent economic data, ignoring the surge in cases, which, in the US, has not yet caught up to a surge in deaths. A surge in China and Hong Kong-listed shares also helped sentiment globally; the CSI 300 index finished the day 5.7% higher, while the Hang Seng Index was up 3.8%. Elsewhere, the S&P 500 gained 1.6%, the FTSE 100 was up 2.1% and the German Dax Index jumped 1.6%.
Uber made headlines on Monday, after announcing it is shelling out $2.7bn in an all-stock deal to buy Postmates, which is a rival to its food delivery service UberEats. Demand for Uber’s core ride service has collapsed due to the pandemic, but online food delivery orders are soaring with consumers stuck at home. According to reporting by NPR, the combined UberEats and Postmates business will have a 37% share of the US food delivery market, behind DoorDash’s 45% and ahead of GrubHub’s 17%. Uber originally tried to buy GrubHub earlier in the year, which would have catapulted it to the number one spot. The company’s share price jumped 6% on the news.
Amazon jumps 5.8% as Nasdaq Composite continues run
The Nadsaq Composite continued to build out its lead over the other major US stock indices on Monday, climbing 2.2% to the S&P 500’s 1.6% and the Dow Jones Industrial Average’s 1.8%. Monday’s gains put the S&P 500 back within touching distance of positive territory year-to-date. The index was led higher by the consumer discretionary, communication services and financials sectors, which gained 3.2%, 2.2% and 2% respectively. Amazon was up 5.8%, while Goldman Sachs climbed 5.1%, and Twitter 4.8%. In the Nasdaq Composite, Tesla led the way, jumping 13.5% after a JPMorgan analyst – who has the lowest price target of all analysts covering the stock – raised his price target, albeit to a level still significantly below the firm’s current share price. Netflix and Ebay helped the Nasdaq higher too, with the pair gaining 3.6% and 3.3% respectively. Streaming service Netflix is now up 52.6% year-to-date, valuing the firm at more than $200bn.
- S&P 500: +1.6% Monday, -1.6% YTD
- Dow Jones Industrial Average: +1.8% Monday, -7.9% YTD
- Nasdaq Composite: +2.2% Monday, +16.3% YTD
Housebuilders follow Barratt higher, with FTSE 100 up 2.1%
Housebuilders helped the FTSE 100 higher on Monday, with the index finishing out the day 2.1% up. Barratt Developments was the biggest winner, gaining 8% after announcing that all of its operational sites were back up and running as of June 30, with all staff now at work again. Rivals Persimmon and Taylor Wimpey followed Barratt higher, finishing 6.2% and 5.1% up respectively. Rolls Royce and a bevy of banking names were also among the day’s top performers. Barrat posted its gains despite also attracting some negative headlines on Monday; the firm has found structural problems with several developments, which it expects to cost £70m to fix. Further down the market cap spectrum, the FTSE 250 index also made up good ground on Monday, finishing the day up 1.4%. In other headlines, insurer Aviva made an unexpected CEO change, 23% was wiped off fashion firm Boohoo Group’s stock after concerns about its factory conditions were reported, and UK car sales sank 35% in June versus the same period a year earlier.
- FTSE 100: +2.1% Monday, -16.7% YTD
- FTSE 250: +1.4% Monday, -19.8% YTD