Another strong day for the US stocks despite the ongoing global uncertainty around Coronavirus and its impact – technology heavy Nasdaq has outperformed gaining +1.87% and closing at 10,058.77, S&P 500 posted a +1.54% gain finishing at 3,100.29 and small caps Russel 2000 was not far behind rising +1.42% closing 1,441.37. VIX has lost just over 4% and settled at 30.43.
Today also marks an end of month, end of Q2 and end of first half of 2020, which means there could be pension and other portfolio rebalancing taking place. Given only two trading days left in US until the weekend, the market activity could be quieter for the rest of the week.
During this quarter, stocks across the US and Europe have demonstrated remarkable returns. These have been mostly a result of a low starting point, following the Coronavirus sell-off back in March and the “all-in” economic stimulus policy from the Fed and other Central Banks. S&P has gained +19.95% this quarter and +38.5% since it’s low of 2,237.40 on 23 March 2020.
On the Micro front, Tesla continues to defy gravity, as the stock is up over +7% today, ahead of the company earnings announcement that is expected later this week. In a leaked company email, CEO Elon Musk tries to manage expectations saying that “breaking even is looking super tight”. Tesla has gained almost +30% in June to close at $1,079 per share from $835 at the end of May.
If you invested your $1,200 stimulus check in Tesla on April 13, you’d have $2,127 today.
— Douglas A. Boneparth (@dougboneparth) June 30, 2020
In the UK, FTSE 100 dropped -0.9% following the news that UK GDP has contracted -2.2% in Q1 compared to previous quarter. This came as Boris Johnson’s announced a new £5bn economic stimulus package to be spent on infrastructure and home building. The pound has reacted positively and so far gained +0.74% against the dollar on the day and stands 1.239.
Other European markets have closed mostly unchanged, with the exception of Dax that gained +0.64% to close at 12,310.93.
US Treasury curve steeped with 2-yr mostly unchanged at 0.159% and 10-yr rising to 0.658% over yesterday.
Tomorrow we start another quarter and the second half of 2020.