If marginally less upbeat than at the start of the session, the European markets nevertheless remained strong on Monday, expressing their relief that Donald Trump didn’t tank the US-China trade deal last Friday.
What makes the gains extra notable is that they come despite Chinese foreign ministry spokesman Zhao Lijian telling reporters that ‘any words or actions by the US that harm China’s interests will meet with China’s firm counterattack’.
Instead investors are focusing on the fact that Trump didn’t announce anything more damaging last well, as well as the fact the Chinese Caixin manufacturing PMI bounced back into expansion territory in May, hitting 50.7.
With its banking stocks, especially Standard Chartered (LON:STAN) which rose 7.9%, looking especially verdant, the FTSE found itself around 6150 after a 90 point increase, roughly 20 points shy of where it was after the bell. That the pound was up 0.5% against the dollar and 0.3% against the euro likely curbed some of the UK index’s enthusiasm – this even though the Brexit talks are an absolute mess.
The Eurozone indices echoed the growth seen by the FTSE, i.e. strong, but not quite as strong as they were earlier in the day. The DAX was at 11750 as it rose 160 points, while the CAC traded at 4750 following a 1.3% increase.
The Dow Jones is currently set to add just 60 points when the bell rings on Wall Street, pushing it back to 25450. Whether or not it gains steam is going to be based on a few things, namely: a) the state of the Markit and ISM manufacturing PMIs, b) if there is any Trumpdate on the US-China situation, and c) how seriously investors are paying attention to America’s civil unrest.
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