Daily market review

United States

Rising infection rates and new restrictions imposed in Florida and Texas sent shares sharply lower Friday. The Dow Industrials fell 2.8 percent to close the week down 3.3 percent, the S&P 500 fell 2.4 percent for a 2.9 percent weekly loss, while the Nasdaq fell 2.6 percent to close the week down 1.9 percent.

Governors of both Florida and Texas specifically cited alcohol consumption at bars as a major factor behind the surge of new infections in both states. These are the first states to reimpose restrictions. Other states, including North Carolina and Kansas, are considering pushing back reopening dates.

Vaxart rose 28 percent on news its oral covid vaccine will be included in a study funded by the US government to accelerate vaccine development.

Bank stocks were pressured by the Federal Reserve's decision, following stress tests, to limit shareholder payouts. The S&P banks group index fell 6.1 percent. Facebook fell 8.3 percent and Twitter fell 7.4 percent after consumer products giant Unilever, citing lack of response to hate speech, pulled its advertising from both platforms.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$0.39 to US$40.66, while spot gold rose US$6.82 to US$1,770.61. The US dollar rose against most major currencies. The US Treasury 30-year bond yield fell 7 basis points to 1.37 percent while the 10-year note yield fell 4 basis points to 0.64 percent.


Pressured by news of rising infections in the US, European stocks moved mostly lower on Friday with the Germany's DAX down 0.7 percent for a 2.0 percent loss on the week and France's CAC down 0.2 percent and 1.4 percent lower on the week. The UK FTSE-100 managed to post a 0.2 percent gain on the day but was down 2.1 percent on the week.

Bank stocks were big losers, down 2.2 percent on the STXE bank index after the Federal Reserve, following annual stress tests, moved to limit US bank dividend payouts.

Positive news came from ECB President Christine Lagarde who said the worst of the pandemic may have passed.

Economic news included continued gains in Eurozone money supply and a much needed boost for Italian business confidence. June's composite index rose to 65.4 from May's 52.7 for the first increase in Italy since February.

Asia Pacific

Most major Asian markets closed higher Friday, while moves on the week were mixed but generally moderate. The regional data calendar was light Friday, with investors instead taking some direction from gains recorded on Wall Street Thursday after US authorities eased rules on bank risk-taking.

Australia's All Ordinaries index closed up 1.4 percent on the day despite a sharp drop in shares of domestic airline Qantas, ending the week down 0.8 percent. Japan's Nikkei and Topix indices closed up 1.1 percent and 1.0 percent respectively on the day but were little changed on the week, with an increase of 0.1 percent and a decline of 0.3 percent respectively. Hong Kong's Hang Seng index underperformed on both the day and on the week with declines of 0.9 percent and 0.4 percent respectively. Chinese markets were again closed Friday, with the Shanghai Composite index remaining up 0.4 percent from last week's close.

Singapore industrial production data showed the impact of the Covid-19 pandemic on the domestic manufacturing sector intensified in May. Output fell 7.4 percent on the year in May after increasing 13.6 percent in April,and dropped 16.5 percent on the month after a fall of 0.5 percent previously. The decline in headline growth was mainly driven by a smaller increase in production in the biomedical industry, which had recorded very strong growth in March and April as domestic firms responded to high demand for products required for public health measures. Growth also weakened elsewhere in the sector in May, reflecting the impact of weak external demand and restrictions on businesses put in place the curb the spread of Covid-19.

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