· S&P 500 ends best quarter since 1998 on a high note
The S&P 500 rallied on Tuesday to finish higher and secure its biggest quarterly percentage gain in more than two decades as improving economic data bolstered investor beliefs that a stimulus-backed rebound for the U.S. economy was on the horizon.
Coming off a drop of 20% in the first quarter, the biggest quarterly decline since the financial crisis in the fourth quarter of 2008, the S&P rallied more than 19.95% to notch its biggest quarterly gain since 1998, at the height of the tech boom.
The Dow Jones Industrial Average .DJI rose 217.08 points, or 0.85%, to 25,812.88, the S&P 500 .SPX gained 47.05 points, or 1.54%, to 3,100.29 and the Nasdaq Composite .IXIC added 184.61 points, or 1.87%, to 10,058.77.
The 17.78% gain in the Dow marked its best quarterly performance since a 21.56% rally in the first quarter of 1987 while the Nasdaq’s 30.63% jump was its best quarter since a 48.18% gain in the fourth quarter of 1999.
While coronavirus cases continue to surge in many states, the U.S. economy is showing signs of pickup, with data indicating consumer confidence increased much more than expected in June.
The gains have been fueled by unprecedented levels of fiscal and monetary stimulus and the easing of restrictions.
But the S&P 500 is still down about 4% on the year, and gains in June stood at just 2% due to the flare-up in virus cases that has threatened to delay reopenings and derail a tentative economic recovery. Federal Reserve Chairman Jerome Powell reiterated in comments on Tuesday that the path of the economy is “highly uncertain.”
Simmering U.S.-China tensions also remained a possible headwind, with Washington beginning to eliminate Hong Kong’s special status under U.S. law in response to China’s national security law for the territory. China said it would retaliate.
· European stocks wrap up their best quarter in five years
European stocks closed higher on Tuesday, wrapping up their best quarterly performance in five years.
The pan-European Stoxx 600 closed up by 0.25% provisionally, but was up almost 13% in the first quarter. It marks the best quarter for the index since the first quarter of 2015.
· Asia Pacific stocks trade mixed as business sentiment in Japan sours; private survey of Chinese manufacturing activity ahead
Stocks in Asia Pacific edged higher in Wednesday morning trade as the second half of 2020 kicks off.
Shares in South Korea led gains regionally, with the Kospi up 1.02% in early trade.
Meanwhile, the Nikkei 225 in Japan added 0.23% while the Topix index hovered above the flatline.
Over in Australia the S&P/ASX 200 traded fractionally higher.
Overall, the MSCI Asia ex-Japan index rose 0.2%.
Markets in Hong Kong are closed for trading on Wednesday for a holiday.
The Bank of Japan’s quarterly Tankan survey released Wednesday showed a worsening business mood in the country. The headline index for large manufacturers’ sentiment worsened to -34 in June — its lowest level since June 2009, according to Reuters — as compared with -8 in March.
Investors also await the release of a private survey of Chinese manufacturing activity in June, with the Caixin/Markit Manufacturing Purchasing Manager’s Index (PMI) expected to be out around 9:45 a.m. HK/SIN. The official manufacturing PMI released Tuesday showed factory activity in China expanding in June.
Reference: CNBC, Reuters
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