Another night, another relaxed equity market, though 150 points higher is considered low volatility for the Dow. U.S. Existing home sales fell by 9.7% to a nine and a half year low in May over an expected fall of 5.6%. Gold prices also climbed, as they have done throughout the pandemic, and throughout the 'trade war". Looking at the ratio of the S&P 500 market index to the price of gold, and the picture is clear. Stimulus drives up the cost of the yellow metal much more than it does equities. https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart. Federal Reserve intervention has also pumped a Venuzualan like $US2 trillion of cash into deposit accounts at U.S. banks this year alone, so currency debasement is always on the minds of golds risk-on investors.

Increased inflation expectations push real rates lower and in turn, drives gold demand against the reduced opportunity cost of holding non-yielding bullion. The fact this virus is no easy beat also boosts the price for one of Australia biggest metal exports.

The straight-talking World Health Organization reported a record jump in global infections, with the most significant increases in North and South America. Thirty thousand new cases emerged on Friday and Saturday in America, which is a six week high. Several U.S. Federal Reserve officials made a clear correlation between unemployment and the disease. If the country can't contain the virus, nor will it contain rising unemployment. Instead, markets took their cue from White House economic adviser Larry Kudlow, who said there was no second wave of the pandemic. Or did they? Lockdown stocks led the charge as Adobe, Amazon, Microsoft and Square all at record highs. Apple rose 2.6% on news it will make chips for its Mac computers. Clothes retailer GAP received some upgrade love from analysts to increase the stock over eight per cent. Earnings per share for the second quarter will drop 42.7 per cent according to consensus estimates.

Toyota's news that its factories have reached 90% of its target output is undoubtedly impressive if not an unsurprising feat from the giant industrial company. Meanwhile, China will deploy new measures to strengthen equity and capital markets there. The proposals include simplifying the path for company IPO's, increasing daily price limits for some equities and in its most American move, letting the larger banks trade bond futures. The trade war pressured their financial markets to be more open as access to U.S. funding tightened up, and the pandemic required new facilities so small and medium-sized firms can raise funds.

US Dow Jones 26024.96 +153.5 +0.6%
US S&P500 3117.86 +20.12 +0.7%
US Nasdaq 10056.48 +110.48 +1.1%
UK FTSE 6244.62 -47.98 -0.8%
German Dax 12262.97 -67.79 -0.6%
Gold Futures ($US/oz) 1766.40 +13.40 +0.8%
Spot Iron Ore ($US/t) 101.50 -1.50 -1.5%

Europes STOXX 600 fell 0.8%, led by selling on the German Dax as the nations COVID-19 reproduction rate jumped to 2.88 infections per person. Merkel famously drew a line in the sand for the Rate OF Infection to be held at one, or hospitals wouldn't be able to cope. German company Wirecard fell another 44.1% and confirmed €1.9 billion in cash is missing. Cruiseship operator Carnival lost 10% as its operational pause was extended until Sept30. Australian markets are up 31 points on the futures bourse with positive news from retailers like Harvey Norman, whose profit for the first 11 months of the 2020 financial year are up nearly 20 per cent from last. Fellow retailer Woolworths also announced full-year guidance around $3.25 billion boosted by an 8.6 per cent increase in food sales.

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Advanced Share Registry Limited published this content on 23 June 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 June 2020 07:26:02 UTC