The Wall Street S&P 500 is expected to open at 0.2% when trading begins later in the day, the futures showed. European stocks struggled to find their way, the London FTSE 100 gaining 0.4% in volatile trade, while the regional benchmark Stoxx Europe 600 was almost flat.
Asia Pacific stocks suffered heavy losses, the Japanese benchmark Topix down 1.8%, the Hang Seng in Hong Kong 1% while the Kospi in South Korea lost 1 , 9%.
Investors were asked to consider the risk of a significant setback in the recovery of the world’s largest economy after senior US health officials said on Sunday that the window to stop the spread of the pandemic across the America was closing.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said that the latest developments in Covid-19 in the United States “can potentially slow the recovery, but are not likely to derail it.”
“With virus cases still on the rise in a number of US states, a more volatile approach by trial and error of reopening now seems more likely, but we expect any new restrictions to be localized,” he said. -he declares.
The United States has 2.5 million confirmed cases of Covid-19 and more than 125,000 deaths from the disease – a quarter of the 10 million infections and half a million deaths worldwide, according to the University Johns Hopkins.
Alex Azar, the US secretary of health and human services, said on Sunday that the Covid-19 cases “were skyrocketing” in the southern United States, where several states ended the foreclosure early. He accused the Trump administration of being “in denial of the problem.”
The S&P 500 fell 2.9% last week after the Federal Reserve announced that it would limit share buybacks and dividends by the largest US banks, and Texas and Florida have taken action to reverse their reopening measures, fueling the fear that a nascent economic recovery will be thwarted.
Some investors fear that a stock rebound since March, based on hopes of a strong economic rebound after the pandemic, has gone too far.
“Stocks were ahead of economic fundamentals,” said Tai Hui, chief Asian market strategist at JPMorgan Asset Management.
However, other strategists believe the market recovery will continue next month as economic data is expected to accelerate. Sébastien Galy of Nordea Asset Management said stocks are under pressure due to the rise in Covid-19 cases in the United States. He added that as the month and quarter approached, investors were forced to sell certain stocks to rebalance their portfolios.
“This pressure is expected to ease at the start of a new month as economic data begins to show signs of an economic recovery,” he said.
The US dollar partially reversed last week’s gains, losing 0.4% against a basket of currencies. Meanwhile, the euro strengthened 0.6% against the US dollar to $ 1.1285, before a meeting between German Chancellor Angela Merkel and French President Emmanuel Macron to discuss the implementation strategy place of an EU stimulus fund.
Crude oil stabilized after positive economic data raised hopes for a recovery in demand, as Chinese industrial profits rebounded in May and eurozone businesses and consumers began to show signs of confidence in a recovery.
Crude oil Brent, the international benchmark, remained stable at $ 41.03 a barrel while West Texas Intermediate, the American marker, gained 0.3% to $ 38.66.
He reversed the losses in the wake of Chesapeake Energy, a pioneer of the American shale revolution, declaring bankruptcy following an oil crash that ravaged producers. Analysts said filing the application for the company’s Chapter 11 could spur other shale players to follow suit.