The fourth up month in a row for Wall Street, but the start to August today will be less than confident after Fitch put America’s AAA rating on a negative outlook, COVID-19 cases continue rising (and deaths) and President Donald Trump maintained his attacks on the US voting system ahead of the November 3 polls.
The Aussie market will be starting flat today after ASX futures trading ended with a one-point fall on Saturday morning.
That was after eurozone shares fell 0.9% on Friday but the US S&P 500 rose 0.8% on the back of those strong tech company earnings late Thursday and reports of a weekend meeting between the Administration and Democrats to discuss the next stimulus package.
Investors are watching to see if local COVID-19 situation depends on whether the Victorian government tightens the Melbourne lockdown statewide and there’s a complete shutdown of the border.
After Friday’s nasty 2% slump on Friday, the ASX was only left with a monthly gain of half a percent.
Chinese shares were up 4.2% for the week and US shares were up 1.7% on the back of good earnings results, particularly for tech stocks, but eurozone shares fell 3.6% and Japanese shares fell 4.6% on uncertainty regarding the economic outlook.
Australian shares fell 1.6% for the week thanks to a sharp fall on Friday on the back of concerns that the lockdown in Melbourne will be intensified and extended.
Bond yields generally fell again over the week with US bond yields hitting a record low. Oil prices fell but metals and iron ore rose and gold made it to a new record high as the US dollar fell further. The falling $US also saw the $A rise briefly above 72 US cents.
Wall Street rebounded late Friday to close higher after trading lower most of the day, weighed down by a mixed batch of earnings results, disappointing economic data, and a lack of progress on Capitol Hill toward another coronavirus aid package.
Driven by blowout earnings from tech heavyweights Apple, Amazon, Facebook, and Google parent Alphabet, stocks rallied at the open, slipped into mostly negative territory during the session, and then recovered in the final hour.
The Dow added 114.67 points, or 0.4%, to close at 26,428.32, the S&P 500 gained 24.90 points, or 0.8%, ending the trading day at 3,271.12 the Nasdaq closed at 10,745.27, up 157.46 points or 1.5%.
For the week, the Dow lost 0.2%, while the S&P 500 gained 1.7% and the Nasdaq surged 3.7%.
For the month, the S&P rose 5.52%, the Dow advanced 2.39% and the Nasdaq rallied 6.83%.
July was a month in which U.S. coronavirus deaths rose by almost 25,000 and cases doubled in at least 18 states, according to Reuters, dealing a crushing blow to hopes of quickly reopening the economy.
The United States has recorded nearly 1.8 million new COVID-19 cases in July out of its total 4.5 million known infections, an increase of 66% with many states yet to report on Friday. Deaths in July rose at least 19% to a total of more than 152,000.
In addition, tens of millions of unemployed Americans lost their $US600 in additional weekly jobless benefits after the White House and Congress failed to reach an agreement to extend the supplement, which has allowed them to pay rent and buy food among other expenses.
The extra unemployment checks are worth about $US75 billion per month and accounted for nearly 5% of personal income in June.
30.2 million Americans were receiving unemployment checks in the week ending July 11. Though government welfare payments have been declining after jumping 110% in April, unemployment benefits increased by 8.5% in June.
