Simon Peters, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for June 2, 2020.
The past 24 hours
Despite stock futures trading negatively over the weekend and continued unrest in cities across the US, major indices in America and around the world started off June on a positive note. The S&P 500 was up 0.4% and the FTSE 100 gained 1.5%, while Asian indices also rose. Mass protests raged across the US again on Monday, leading to curfews being imposed in New York and San Francisco, while the National Guard was called in response to protests in Washington, DC that led to fires being set outside the White House.
A spike in Covid-19 cases is expected to result from the protests, potentially disrupting the US recovery from the pandemic – optimism around which has been the main force driving the recent stock market surge. It was reported on Monday that President Trump called US governors “weak” and told them to “dominate” the protestors. Chinese officials have also jumped on the chance to criticise the Trump administration for how it has responded to the protests, arguing that he is a hypocrite after the President publicly supported protests in Hong Kong. China’s state media also hit back at President Trump’s announcement that he plans to strip Hong Kong of its special trade and travel status with the US, as tensions continue to rise between the two superpowers.
SpaceX success boosts Tesla stock
The real estate and energy sectors were the biggest winners in the S&P 500 on Monday, while the health-care sector found itself in the red. Financial stocks also made progress, with the consumer finance sub sector leading the way with a 2.2% gain. The S&P 500 was led by double-digit gains from beauty firm Coty, clothing retailer Gap and Norwegian Cruise Lines, although the three stocks are still down 61%, 44% and 70% year-to-date respectively.
Out of the three major US stock indices, the tech heavy Nasdaq Composite had the best start to the week, gaining 0.7%, with its year-to-date gain now standing at 6.5%. The index has risen this year while the S&P 500 and Dow remain in negative territory, as investors are betting that a post-pandemic economy focused around remote working and cloud computing will disproportionately benefit many of the tech firms that make up a large proportion of the Nasdaq. Tesla helped take the index higher on Monday, gaining 7.6% after Elon Musk’s other venture, SpaceX, successfully docked a spacecraft with the International Space Station.
- S&P 500: +0.4% Monday, -5.4% YTD
- Dow Jones Industrial Average: +0.4% Monday, -10.7% YTD
- Nasdaq Composite: +0.7% Monday, +6.5% YTD
UK stock indices continue to push higher
After posting gains on Monday, the FTSE 100 is now up 2.9% over the past five trading days, and 7.2% over the past month. The FTSE 250 has enjoyed solid recent performance too, gaining 5.4% over the past five trading days and 8.3% over the past month.
Bank Standard Chartered, food processing firm Associated British Foods and education publisher Pearson led the FTSE 100 on Monday, all climbing by around 8%. In the FTSE 250, African telecoms firm Airtel, property developer Hammerson and gambling firm Ramp Group were the day’s biggest winners, climbing 12.9%, 12.1% and 9.8% respectively.
Ryanair made headlines late on Monday in New York, where the firm failed to get a judge to throw out a securities fraud lawsuit, with district judge Paul Oetken saying that shareholders could attempt to prove it misled shareholders over its views on labour unions. It was also reported that a London Stock Exchange public consultation has found strong support for cutting stock market trading hours in the UK, which are substantially longer than in the US. The hope is that cutting the burden of trading hours would help to improve gender diversity and mental health in the financial sector.
- FTSE 100: +1.5% Monday, -18.2% YTD
- FTSE 250: +1.4% Monday, -21.1% YTD