Global Stocks Rise and Gold Climbs Toward $2,050

Global stocks climbed on Wednesday, as positive earnings caught the eye despite mounting risks sending gold above $2,000 an ounce to record highs.

Encouraging signs of an economic recovery in Europe, in the form of positive data, also boosted stocks as investors waited for news on another U.S. stimulus package.

Data from ADP released Wednesday morning showed that U.S. private sector payrolls increased by 167,000 in July, far less than the 1 million increase expected by economists. The disappointing number comes ahead of Friday’s July nonfarm payrolls report from the Labor Department.

Shortly after the open, the Dow Jones Industrial Average was up 196 points, or 0.7%, while the S&P 500 and Nasdaq Composite gained 0.4% and 0.1%, respectively.

Agence France-Presse/Getty Images

The pan-European Stoxx 600 index rose 0.4%, while Germany’s DAX was 0.4% higher and the French CAC was 0.7% up.

Eurozone retail sales returned to pre-Covid levels in June after rising 5.7% from May. Business activity in the bloc returned to growth in July, albeit slightly below economists’ expectations, with especially strong growth in France and Germany, according to the closely followed purchasing managers index. Spain and Italy also recorded renewed growth despite recent signs of spikes in coronavirus cases. Growth in China’s services sector slowed in July from the decade highs of June but continued to expand.

Despite the tentatively positive data, rising coronavirus cases around the world and escalating tensions between the U.S. and China over video-sharing app TikTok created enough uncertainty for gold prices to surge. The precious metal climbed to new highs overnight, with gold futures reaching $2,050 and spot gold trading at $2,040 in early European trading.

“While the markets continue on a cautious recovery path, the big move for gold through the $2,000 per ounce threshold is a reminder of the lingering fears over coronavirus and geopolitical tensions linked to China,” AJ Bell investment director Russ Mould said.

The U.S. and China have agreed to high-level talks on Aug. 15 to assess Beijing’s compliance with the bilateral trade deal signed earlier this year, The Wall Street Journal reported. The agreement requires regular compliance updates but the talks come at a time of heightened tensions between the world’s two largest economies.

Walt Disney (ticker: DIS) shares gained 6.3% after reporting better-than-feared results for its fiscal third quarter as the entertainment company had to contend with lost revenue, given that its parks were closed during much of the quarter. The company’s Disney streaming service gained millions of viewers in the last quarter amid stay-at-home orders.

CVS Health (CVS) shares were down 1.4% after the drugstore chain raised its full-year financial forecasts while reporting financial results that beat analysts expectations on the top and bottom line.

Beyond Meat (BYND) shares slid 4.4% even though its financial results came in ahead of estimates for the second quarter. Investors were concerned about the alternative meat producer incurring higher-than-expected costs tied to the coronavirus pandemic.

Novavax (NVAX) shares surged 14.5%. Late Tuesday, the company said the results of its Phase 1/2 clinical trial for its experimental Covid-19 vaccine were promising.

Barrons / Balkantimes.press

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