Global Stocks Tread Water
June 05 2020 - 12:01AM
Dow Jones News
By Joanne Chiu
International markets were little changed, with persistent
concerns over the pace of economic recovery tempering investor
appetite after a recent rally.
Hong Kong's Hang Seng Index advanced slightly in Friday-morning
trading. E-mini S&P 500 futures rose 0.3%, suggesting U.S.
stocks could rise Friday. Benchmarks in mainland China, Japan and
Australia pulled back modestly. South Korea's Kospi Composite rose
more than half a percent.
On Thursday the S&P 500 broke a four-session winning streak
as disappointing trade and job data showed the coronavirus
pandemic's continued toll on the economy.
Equity markets and the broader economy are disconnected, said
Daryl Liew, chief investment officer at REYL Singapore.
The recent stock-market surge was partly driven by massive
stimulus, plus optimism over "the loosening of restrictions across
the world and the expectations that we could see a V-shaped
recovery," he said.
"However, we haven't really seen that in the broader economy
yet," Mr. Liew said. He said if business activity doesn't rebound
by the third quarter, "governments might have to do more because
otherwise you're going to see a flood of bankruptcies and
insolvencies."
Mr. Liew said he is holding more cash after reducing his
holdings of shares because of uncertainties including potential new
waves of coronavirus infections in some countries, and escalating
U.S.-China tension ahead of the U.S. presidential election in
November.
Lewis Wan, chief investment officer at Pride Investments Group,
said he is cautious on equities following a global rebound. In
dollar terms, the MSCI All Country World Index had jumped 37.5% as
of Thursday, compared with its low on March 23, according to
FactSet.
"We're probably going to see more volatility in equities until
there's more certainty over the development of vaccines," and the
U.S.-China relationship stabilizes, he said. Mr. Wan said any
resurgence of new coronavirus infections could damage already
fragile investor confidence.
The WSJ Dollar Index, which measures the U.S. currency against
16 others, was little changed at 91.22 on Friday in Asian trading
hours. As measured by this index, the dollar has weakened for eight
of the last 9 trading sessions to Thursday, and has retreated
nearly 6% from a peak in late March, according to Dow Jones Market
Data.
Write to Joanne Chiu at joanne.chiu@wsj.com
(END) Dow Jones Newswires
June 05, 2020 00:46 ET (04:46 GMT)
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