Stocks Pause After Reopening Rally

Markets have had a slightly softer open this morning following their rally yesterday, with the S&P 500 having gained 1.7%, taking the index’s return over the past five trading days to 5.4%. US futures currently indicating around 0.7% of those gains will be given back. This follows on from a cautious session in Asia overnight ahead of a key policy meeting in China where more stimulus measures may be unveiled.

Investor sentiment this week has been buoyed by a variety of factors, including promising reports from an early human trial of a Covid-19 vaccine, and all 50 US states beginning to reopen in some form. Yesterday, Connecticut became the final state to take the first steps toward lifting restrictions, with shops and restaurants allowed to reopen. There are significant concerns of a second wave as the lockdowns end, and as of yesterday more than a dozen states had registered an upward trend in average daily cases over the past week. 

So far, more than one and a half million people in the US have tested positive for the virus, and close to 100,000 have died. States are reopening at rapidly different paces, with some including Georgia and Texas undertaking aggressive plans, while states such as New York and California approach the situation more cautiously.

Elsewhere, easyJet (ESYJY) have said they will resume flights on some routes from the 15th June. It will be strongly advised to wear face masks during the flight, there will be no food served on board and 1.5m distancing where possible. This comes just after the company announced that it had been victim of a huge cyber attack that affected 9 million customers.

 

Energy stocks lead Wednesday rally

Energy stocks were the biggest winners in yesterday’s rally, gaining 3.8% overall, while oil prices were marginally higher. National Oilwell Varco (NOV) and Halliburton (HAL) were two of the biggest energy sector gainers on the day, closing 8% and 7.2% higher respectively. All 11 sectors in the S&P 500 were in the green, with the communication services, financials and information technology the other sectors which gained more than 2%. The Dow Jones Industrial Average, which closed Wednesday 1.5% higher, was led by 4% plus gains from Walt Disney (DIS), Intel (INTC) and American Express (AXP). 

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