Hello and welcome to our continued coverage of the global economy, financial markets, the eurozone and business.
The Covid-19 pandemic continues to test the resilience of the markets – and today, investors are entering the new week in a climate of hope.
Equities rallied in Asia, with benchmark in China CSI 300 leaping 2.5% to reach a new high in five years. Japan Nikkei gained 2% in a wave of risk taking, and we expect gains in Europe and the United States today.
This follows a decent rally on Wall Street on Friday after Gilead Sciences Inc. reported that its antiviral drug remdesivir poses a reduced risk of death in critically ill COVID-19 patients.
Gilead warned that clinical trials have yet to be conducted to confirm the benefits. But it reinforces the hope that medical science will allow the global economy to return to more normal times.
David Madden of CMC markets Explain:
One study found that Remdesivir, an antiviral drug produced by Gilead Sciences, reduced the death rate by 62%.
The drug in question has been considered a potential treatment for coronavirus for several months, and the results of the latest study have stimulated market sentiment.
Hopes of an economic recovery after the pandemic are also growing, after the China Association of Automobile Manufacturers reported a recovery in demand.
Car sales in China jumped 11.6% in June, the third month of consecutive growth, figures released last week revealed. This suggests that Chinese consumers feel confident about their economic prospects as its economy recovers.
But the pandemic continues to rage. The World Health Organization reported a record increase in global cases of coronavirus on Sunday, with a total up of 230,370 in 24 hours. The largest increases were recorded in the United States, Brazil, India and South Africa.
In total, nearly 12.9 million cases have been recorded, with 568,296 deaths from the virus. Florida alone reported 15,000 new record cases on Sunday.
A new study has also suggested that people who have recovered from Covid-19 may lose their immunity to the disease within a few months. Rather, it would undermine the hope that “collective immunity” could protect the global economy.
But investors seem keen to examine these issues and place their hopes in a recovery in growth and profits later this year.
The second quarter profit season begins this week, which will test whether companies are more optimistic – and whether the market rebound since late March is built on solid foundations …
- 8:00 a.m.BST: Chinese direct foreign investment data for June
- 4.30 p.m. BST: Andrew Bailey, Governor of the Bank of England, delivers a speech on “Libor: Entering the Endgame”