Stocks pull back on second wave fears
Major indices across the globe slipped as a new wave of COVID-19 cases in China, Germany, the US and elsewhere, has rattled investors. A number of Asian indices dropped into the red, with the Nikkei 225 falling the most. European markets followed suit to close negatively yesterday and US benchmarks also suffered.
Stocks boosted by China recovery face downside risk
A basket of stocks that have seen an increase of about 15% since mid-March, from the strong sales during China’s economic recovery, are likely to suffer from the tensions between China and the US, Bloomberg reports. Goldman Sachs analyst, David Kostin, suggested that “US stocks with high China sales exposure” will likely “face downside risks as the US presidential election nears”.
Famed investor calls fourth major bubble
Jeremy Grantham, co-founder and chief investment strategist at Grantham, Mayo, van Otterloo & Co, told CNBC earlier this week what we’re experiencing in the markets “is the fourth ‘real mccoy’ bubble of [his] investing career”. He added that these “great bubbles can go on for a long time and inflict a lot of pain”.
Pandemic winners and losers
During the first 100 days of the coronavirus pandemic, information technology was the top-performing sector, registering a 17.2% jump between 10 March and 17 June, MarketWatch reports. It was buoyed by the likes of Apple, Microsoft and Cisco, which rose 23.2%, 20.7% and 15.2% respectively during the period. Consumer discretionary came in second place, rising 16.6%, while the worst-hit sector was utilities, down 7.6%.
Hertz drops “controversial” share sale
The bankrupt car rental company suspended its $500m share sale following discussions with the SEC, the Financial Times reports. The sale was aimed at raising cash for restructuring, although Hertz highlighted that the stock had little value other than if there was a “significant and rapid and currently unanticipated improvement in business conditions”.
JD.com joins exodus
A secondary listing on the Hong Kong Stock Exchange saw the e-commerce giant’s share price close at $HK234 — up 3.5% from the HK$226 offer price. JD.com follows Alibaba and NetEase in shifting to Hong Kong as tensions between the US and China continue. It raised $3.9bn from the share sale, which coincided with the annual “618” online shopping extravaganza.