The US has experienced more than 170,000 coronavirus-related deaths, amid 5.5 million cases.An annualised 33 per cent slump in the US economy in the June quarter – the worst quarterly decline in US history - was hardly positive news.every nuance of the trade relationship produced a market response. Now the US is waging an economic war on China on almost every front, from tariffs to sanctions, from the escalating assault on its tech companies to the provocative fighter jet sales to Taiwan.
There’s an obvious explanation for the timing of the shifts in the sharemarket, bond market, currency relativities and commodity prices. It’s too simplistic to say that the sharemarket has been driven by the absence of alternatives. The surge in gold prices, the slide in bond yields and the decline in the dollar say that some investors have sought out alternatives.
The apparent disregard for the widening points of friction with China is, given last year’s sensitivity to the relationship, curious.The fracturing of the relationship - now almost baked in - threatens trillions of dollars of US investment and activity if China chooses to respond and US companies lose access to China’s domestic market, have to relocate their operations and global activity is slowed by the flow-on effects.
It is the FAANG+ stocks – Facebooks, Amazon, Apple, Netflix, Google, Tesla and the other large tech companies – that have powered the market’s recovery. Where the S&P 500 is up just over 50 per cent since March, the FAANG+ stocks are up almost 100 per cent.
Notthenineoclo2 The market responding to a TRUMP reelection simple.
Based on what?
I think they were waiting to see if Joe was the nominee or not. Now the market knows that it will be Trump 2020. Nothing too mysterious about that.
Because the US Treasury poured over a trillion dollars into it artificially inflating the worth of many stocks. It can’t last.
Easy money. TRUMP is on a roll.
It just goes to prove that the stock market bears no relationship to the economy. 170k dead and rising rapidly, 40 million unemployed, GDP tanking, and the stock market is up? Its just a casino for rich people to gamble with other peoples' money.
So, back to where it started