- US stocks jumped Monday following a rally in China, where stock-buying was encouraged to support the recovery from the coronavirus crisis.
- The JSE was up half a percent, while the rand stayed below R17/$.
- Read more on Business Insider.
US stocks jumped on Monday, following China's stock market rally after a state-led newspaper said that it's important to foster a healthy bull market after the coronavirus pandemic.
The front-page editorial in China's Securities Times on Monday pushed the Shanghai Composite index up 5.7%, its biggest single-day increase since 2015. In addition, searches for how to open a stock account surged on Chinese social media following the editorial, according to Bloomberg.
The JSE's all share index was up half a percent to 54773 points, while the rand remained below R17/$ - it was last trading at R16.94.
Here's where US indexes stood shortly after the start of the trading day in the US:
- S&P 500 : 3,170.40, up 1.3%
- Dow Jones industrial average : 26,179.56, up 1.3% (339 points)
- Nasdaq composite : 10,367.44, up 1.6%
The gains follow a strong June jobs report last Thursday, which showed American businesses added 4.8 million payrolls last month handily beating expectations of a 3 million payroll increase. Further, the unemployment rate fell to 11.1%, below the anticipated reading of 12.5%.
The so-called reopening trade gained momentum Monday, as investors continue to shrug off growing new coronavirus cases. Shares of airlines, cruise lines, and retailers were higher as the US companies continue to gradually expand operations.
Investors also kept a close eye on potential coronavirus treatments or vaccines. Shares of Becton Dickinson and Co. gained more than 4% after the company said the FDA has granted its rapid COVID-19 test emergency use authorisation.
"Investors trying to find a negative correlation between stock market performance and COVID-19 infections are having a difficult time," said Hussein Sayed, chief market strategist at FXTM. "There doesn't seem to be one at the moment and that's evident in today's robust rally."
Warren Buffett's Berkshire Hathaway on Sunday purchased Dominion Energy natural gas assets in a $10 billion deal. It's Buffett's first major "elephant-sized" acquisition in years. Shares of Uber jumped after the company reportedly agreed to buy Postmates in a $2.65 billion deal.
Still, experts maintain the US economy still is a long way from attaining pre-pandemic levels. Goldman Sachs cut its estimates for US gross domestic product this quarter, saying consumer spending may stall in the next few months.
Oil prices slid, with West Texas Intermediate crude falling as much as 1.2%, to $40.15 per barrel. Brent crude, the international benchmark, hovered around little changed after climbing 2.1%, to $43.71 per barrel, at intraday highs.
Receive a daily update on your cellphone with all our latest news: click here.
Get the best of our site emailed to you daily: click here.
Also from Business Insider South Africa:
- Facing serious financial issues? Debt counselling may be your best option – but not for everyone
- A dexamethasone producer in SA has sold out its stock - as demand for the Covid19 drug surges
- The US is buying Covid-19 drug remdesivir like crazy. A generic is coming to SA – cheap.
- Flu from pigs in China could cause a new human pandemic – but it may spell opportunity for SA
- South Africa now has its first online, unaccredited 'dagga university'
- An elderly elephant seal made a 5,000km journey for a 4-day summer vacation near Mossel Bay