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Shanghai slump drives decline

Markets in Asia suffered a setback yesterday, led by the Shanghai Composite index, which suffered its worst drop since the coronavirus pandemic began to take hold, MarketWatch reports. Robust economic data from China couldn’t arrest the slide, which had a knock-on effect on markets globally. European indices were daunted. US benchmarks slipped, in particular the Nasdaq.

  • FTSE 100 – 6,250.69 (-0.67%)
  • Dow Jones – 26,750.76 (-0.44%)
  • S&P 500 – 3,213.51 (-0.40%)
  • NASDAQ – 10,620.38 (-0.76%)
  • Stoxx 600 – 372.13 (-0.47%)
  • SSE Index – 3,210.10 (-4.50%)

China’s largest domestically listed stock drops by $25bn

Liquor maker Kweichow Moutai slumped 7.9% yesterday wiping $25bn from its value in its worst decrease since October 2018, Bloomberg reports. The stock had risen nearly 50% for the year before its drop. This followed criticism from influential newspaper People’s Daily that the brand is associated with corruption cases.

Royal Caribbean Cruises stock price

Royal Caribbean Cruises has registered a strong performance recently, fuelled by optimism over a coronavirus vaccine and after announcing Royal Caribbean Group has acquired all outstanding shares in Silversea Cruises.

Will markets peak in July?

Referencing analysis from legendary investor Larry Williams on CNBC’s Mad Money, Jim Cramer said: “based on this cycle forecast, Williams sees the S&P 500 peaking around 27 July — so we’ve got two more weeks of strength, a lifetime in this market.” Similarly, Seeking Alpha analysis suggests recent rotational trades out of tech could indicate a new stage of the market cycle.

Earnings preview: easyJet

The airline’s stock has been one of the most purchased since the coronavirus pandemic began, as bulls bet on a climb when flights resume. Investors will be keen to see the effect the events of the past quarter have had on its fundamentals when it reports later today.

Dalio’s fund dips as quants flail

Morgan Stanley’s recent Quant Trends report highlights how quant funds have failed to capitalise on recent market volatility, Financial News reports. Chief among those is Ray Dalio and Bridgewater Associates’ Pure Alpha strategy, which has slumped 20.6% this year. Meanwhile, Bridgewater Associates’ All Weather fund is only down 2.8% YTD.

Apple’s bond boost

The tech giant is among a number of major US stocks to benefit recently from a US Federal Reserve bond-buying programme. Through the purchase of up to $250bn of debt already issued and $500m of newly issued bonds, the Fed intends to shore up businesses during the pandemic. Apple saw its share price hit a new all-time high of $390.90 on 15 July.

Gold ETFs overtake managed funds

ETFs have increased their holdings in the precious metal to 3,000 tons, the highest total ever recorded, Bloomberg reports. This means that gold-backed ETFs have now overtaken actively managed money as the main driver in the futures market. Gold broke above $1,800 per ounce for the first time in eight years last week.

Japanese investors flee foreign stocks

Investors in Japan sold net JPY3.64trn of overseas stocks last week, according to Bloomberg and Japanese Finance Ministry data. The record exodus that week was nearly six times that of any other previous week. While JPY2.3bn worth of shares were bought during the period — similar to previous weeks — a record JPY5.9bn were sold.

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