Asia-Pacific Risk Appetite Wanes On Worries Over Escalating Dispute Between US and China

The major Asia-Pacific stock indexes finished lower on Thursday, pressured by concerns over deteriorating U.S.-China relations and the economic cost of a resurgence in coronavirus infections that is prompting some places to reimpose containment measures. Losses may have been contained, however, by a slew of Chinese economic data including a better-than-expected GDP report.

On Thursday, Japan’s Nikkei 225 Index settled at 22770.36, down 175.14 or -0.76%. Hong Kong’s Hang Seng Index finished at 24970.69, down 510.89 or -2.00 or South Korea’s KOSPI Index closed at 2183.76, down 18.12 or -0.82%.

China’s Shanghai index settled at 3210.10, down 151.21 or -4.50% and Australia’s S&P/ASX 200 Index finished at 6010.90, down 42.00 or -0.69%.

US Imposes Visa Restrictions on Huawei, Other Chinese Tech Companies, Citing Human Rights Abuses

U.S. Secretary of State Mike Pompeo, citing human rights abuses, said the U.S. will impose visa restrictions on Chinese technology firms, the latest move expected to strain relations between Washington and Beijing.

Pompeo, who has previously described Huawei and other Chinese state-backed businesses as “Trojan horses for Chinese intelligence,” said the actions should serve as a warning for other tech companies.

“State Department will impose visa restrictions on certain employees of Chinese tech companies like Huawei, that provide material support to regimes engaging in human rights violations and abuses globally,” Pompeo said.

In a statement to CNBC, Huawei said it was “disappointed by this unfair and arbitrary action.” The company also said it “operates independent of the Chinese government” and is a “private, employee-owned firm.”

Shares of China’s Biggest Chipmaker SMIC Surge Nearly 202% in Shanghai Debut

SMIC, China’s biggest chipmaker, saw its shares surge over 200% on its first day of trade in Shanghai. SMIC issued 1,685,620,000 shares at 27.46 Yuan per share, raising 46.28 billion Yuan ($6.62 billion).

The share sale is an important moment for the company but also China’s broader ambition to grow its domestic semiconductor industry, a push that has been accelerated by the trade war between the U.S. and China.

SMIC is seen as a key player in China’s ambition to boost its domestic chip industry. The company is known as a contract chip manufacturer, meaning it makes the semiconductors designed by other firms.

South Korea’s Central Bank Holds Rates at Record Low amid Push to Curb Home Price Surge

The Bank of Korea has held the base rate steady at a record low of 0.5%, it announced in a text message, in line with the forecasts of all 30 economists polled by Reuters.

The rate is at its lowest since the central bank adopted the current system in 1999, having slashed a total of 75 basis points since March this year to fight the economic fallout from the coronavirus pandemic.

The central bank has been working in tandem with the government to extend liquidity to businesses hit by the health crisis but is wary of rising debt and high property prices.

For a look at all of today’s economic events, check out our economic calendar.

Asian Shares Finish Mixed as US Sanctions Derail China’s Rally, Japan’s Nikkei Hits 5-Week High

The major Asia-Pacific stock indexes finished mixed on Wednesday, bucking the trend on Wall Street amid rising concerns over U.S.-China tensions. Underpinning some and preventing an even steeper sell-off in others was a positive reaction to the latest developments surrounding a potential vaccine for the coronavirus.

On Wednesday, Japan’s Nikkei 225 Index settled at 22945.50, up 358.49 or +1.59%. Hong Kong’s Hang Seng index is trading 25436.99, down 40.90 or -0.16% and South Korea’s KOSPI Index closed at 2201.88, up 18.27 or +0.84%.

In China, the Shanghai Index settled at 3361.30, down 53.31 or -1.56% and Australia’s S&P/ASX 200 Index finished at 6052.90, up 111.80 or +1.88%.

Trump Signs Law Slapping Sanctions on China for Interference in Hong Kong

Shares in China and Hong Kong retreated in response to President Donald Trump’s signing of legislation designed to impose sanctions on China in response to its interference with Hong Kong’s autonomy.

Trump also said that he signed an executive order ending the preferential treatment that Hong Kong has long enjoyed.

The law, dubbed the Hong Kong Autonomy Act, would slap mandatory sanctions on Chinese officials and companies that helped back Beijing’s imposition of a security law that clamps down on dissent in Hong Kong. The sanctions bill passed both houses of Congress earlier this month.

“Hong Kong will now be treated the same as mainland China,” Trump said during a lengthy speech in the White House Rose Garden that quickly drifted away from that legislation to touch on a variety of campaign issues.

“No special privileges, no special economic treatment and no export of sensitive technologies. In addition to that, as you know, we are placing massive tariffs and have placed very large tariffs on China.”

Moderna Says Its Vaccine Produces Antibodies to Coronavirus

Investors are shrugging off reports of a surge in COVID-19 cases in the United States and other countries amid positive developments toward a vaccine that could eventually end the pandemic that has driven demand destruction throughout the world.

Moderna said its coronavirus vaccine produced antibodies in all patients in an early trial, raising hope for a faster economic recovery.

Biotech Moderna’s potential vaccine to prevent COVID-19 produced a “robust” immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial, according to newly released data published Tuesday evening in the peer-reviewed New England Journal of Medicine.

Shares of Moderna surged more than 16% in after-hours trading on Tuesday.

Australia Shares End Higher Tracking Wall Street Gains, Vaccine Optimism

Australian shares closed higher on Wednesday, mirroring overnight gains on Wall Street, with material stocks providing a major lift to the domestic benchmark. Its benchmark index posted its best day since June 30, despite tightened restrictions on movement to contain a fresh outbreak of COVID-19 that has pushed the national tally over 10,000.

Basic material stocks chased overnight gains in their U.S. counterparts, which were also a major boost to the U.S. indices in the last session.

Japan Shares Hit 5-Week High on Vaccine, Economic Growth Hopes

Japanese stocks rose on Wednesday to a five-week high as encouraging results from a coronavirus vaccine study and optimism about swift economic growth supported expectations that corporate earnings would pick up in the second half of the year.

The benchmark Nikkei Index hit its highest level since June 10, with industrial and consumer directional shares leading the advance.

In other news, recent data from many economies has shown signs that corporate activity and consumer spending are recovering from coronavirus-induced sharp declines.

Meanwhile, the Bank of Japan kept monetary policy steady on Wednesday and maintained its view that the economy would gradually emerge from the pandemic.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Climb Toward Five-Year High

The major Asia-Pacific stock indexes were up across the board on Monday, climbing toward five-month highs as investors shrugged off concerns over the rising number of coronavirus cases stateside. Meanwhile, investors continued to bet the U.S. earnings season would see most companies beat forecasts given expectations had been lowered so far by coronavirus lockdowns.

On Monday, Japan’s Nikkei 225 Index settled at 22784.74, up 493.93 or +2.22%. Hong Kong’s Hang Seng Index finished at 25772.12, up 44.71 or +0.17% and South Korea’s KOSPI closed at 2186.06, up 35.81 or +1.67%.

China’s Shanghai Index settled at 3443.29, up 59.96 or +1.77% and Australia’s S&P/ASX 200 Index finished at 5977.50, up 58.30 or +0.98%.

Investors Becoming Immune to Deterioration in Relationship between U.S. and China

The strong move upward for Chinese stocks came despite comments by U.S. President Donald Trump on Friday that the relationship between Washington and Beijing has been “severely damaged” by the coronavirus pandemic, CNBC wrote.

President Trump said he isn’t focused on a possible next phase of the U.S. trade deal with China. Trump blamed China for not stopping the spread of the coronavirus, according to reporters who were traveling with the president on Air Force One en route to Florida.

Trump said he wasn’t even thinking about “phase two” of the trade deal and that he had many other things on his mind.

US Warns Citizens of ‘Arbitrary Detention’ in China

The U.S. has asked its citizens to “exercise increased caution” in China due to a “heightened risk of arbitrary detention”- a claim slammed by Chinese state-backed media Global Times as a “blatant distortion of truth.”

The U.S. advisory was issued on Saturday and did not specify what prompted the alert.

Relations between the U.S. and China have been at their worst in decades. But the U.S. is not alone in warning its citizens of the potential risk that laws may be arbitrarily applied within Chinese territory.

Last week, Australia advised its citizens not to travel to Hong Kong, and to reconsider their need to remain in the city, due to uncertainties surrounding the new national security law there.

China’s Central Bank Sees Little Need for More Emergency Stimulus This Year

At a regular briefing with reporters on Friday, representatives of the People’s Bank of China indicated there was little need for more emergency measures that had been rolled out as COVID-19 hit business activity earlier this year.

“(We must) recognize that appropriately lowering interest rates doesn’t mean the lower, the better,” Guo Kai, deputy director of the central bank’s monetary policy department, told reporters, according to a CNBC translation of his Mandarin-language remarks.

Amid the height of the coronavirus outbreak in the first half of this year, Chinese banks loaned a record high 12.09 trillion yuan, according to central bank data.

“In the next half of the year, the economy will return to normal, and the role of traditional monetary policy may become more obvious,” Guo said at a press briefing. “We have entered a more normal state.”

For a look at all of today’s economic events, check out our economic calendar.

The Renewed S&P 500 Upswing Is Knocking on the Door

As expected, the S&P 500 closed back above the mid-June highs resistance yesterday. The volume slightly rose but I wouldn’t read too much into it – after all, the early June highs of around 3230 should provide for a bit stiffer battle. How the market reached the current 3160-ish levels, is what counts more.

And after the daily ride higher throughout the Independence Day week, we’re experiencing a shallow sideways correction now. When we look in retrospect, will it remind us of bullish flag? In other words, can we expect the market to power higher and soon?

I think so. Higher stock prices are likely despite the high yield corporate bonds having lagged yesterday, or the investment grade corporate bonds suffering a rare daily decline. Market reaction to today’s unemployment claims won’t probably support the bulls to a great extent, yet I expect the push higher in stocks to continue.

In today’s analysis, I’ll cover the reasons why, and also discuss the non-confirmations that I would like to see resolved constructively.

I think the breakout will be confirmed shortly, and that the bulls will prevail in the clashing narratives and facts on the ground:

(…) I say so despite the uptrend in new U.S. Covid-19 cases that has many states stepping back from the reopening, rekindling lockdown speculations. I say so despite the Fed having its foot off the pedal in recent weeks, which makes for more players looking at the exit door as the rising put/call ratio shows.

The dollar is taking it on the chin, and emerging markets are seeing stellar gains, boding well for the U.S. markets. V-shaped recovery being real or not, corona vaccine hype or not, stocks love little things more than the central banks standing ready to act. And the punch bowl isn’t about to be removed any time soon.

The only policy risk is a lockdown miscalculation – did you see how the ASX 200 Composite (take that as Australia’s S&P 500) took to Victoria’s 6-week lockdown institution? Thankfully for the U.S. economy, Larry Kudlow (speaking for Fox Business) is in no mood for a second nationwide lockdown.

Yes, corona cases are rising, but testing has risen too. What about deaths? As the below CDC chart seen on OffGuardian shows, any news of their spike would be an exaggeration, as Mark Twain would probably say.

Food for thought and inquisitive minds. Sticking with the markets, let’s check upon yesterday’s S&P 500 performance.

S&P 500 in the Short-Run

I’ll start with the daily chart perspective (charts courtesy of http://stockcharts.com ):

On Wednesday, prices rose back above the horizontal line connecting mid-June tops, on a not so extraordinary volume. But is that a necessarily bearish omen? I don’t think so – the swing structure gives the bulls the benefit of the doubt. Please note that in the latter half of May (when stocks were peeking above the late April highs), the volume on those days wasn’t outstanding either.

Such were my yesterday’s thoughts as to the daily indicators:

(…) Both the CCI and Stochastics keep supporting the upside move – it’s only the RSI that feels tired. This doesn’t concern me that much – it’s not flashing a bearish divergence, it isn’t languishing at an extreme reading. In short, it doesn’t preclude the rally from going on once the current breather is over.

And until I see credible signs that the markets are getting spooked by corona, botched policy responses or anything else, there is little point in acting as if the sky is falling. It isn’t the case – to be clear, the time to turn really bearish would come, but we’re not there yet.

Whenever markets start acting jittery, it pays to remember the big picture:

(…) Recapping the obvious, stocks are on the upswing after the bears just couldn’t break below the 200-day moving average, which means that the momentum is with the bulls now. The daily indicators keep supporting the unfolding upswing, and volume doesn’t raise red flags either.

Let’s check the credit markets’ message next.

The Credit Markets’ Point of View

Yes, high yield corporate bonds (HYG ETF) scored an upswing yesterday, but are still trading below Monday’s closing prices. Please visit this free article on my home site so as to see more of the discussed charts. To justify turning more bullish on stocks, renewed animal spirits in the junk corporate bonds arena would be needed.

And not only in junk corporate bonds – it’s that the investment grade ones (LQD ETF) have wavered yesterday. But similarly to the HYG ETF move, the volume in LQD ETF hasn’t been remarkable, which is why I am not jumping to conclusions (and definitely not bearish ones) just yet.

The respective ratios (HYG:SHY and LQD:IEI) mirror that short-term indecisiveness perfectly. A daily increase in one, and a daily decline in the other. The overreaching dynamic is though one of an uptrend, which is why I look for the daily non-confirmation to be resolved with an upside move.

Encouragingly, the ratio of high yield corporate bonds to all corporate bonds (PHB:$DJCB) has turned higher yesterday. That’s a gentle nod in favor of the HYG:SHY ratio’s upswing.

As said, I don’t see a proof that the sky is falling – should I see one, I’ll change my mind and let you know about it. With the Fed waiting in the wings, the path of least resistance remains higher. And don’t forget about the infrastructure bill or the second stimulus check either.

If you look at the HYG:SHY chart with the overlaid S&P 500 closing prices, you’ll see that stocks didn’t really get more extended than they were since the late June bottom. While this condition might not last all too long into the future, I don’t expect stocks to be brought immediately down courtesy of this factor alone.

From the Readers’ Mailbag

Q: Although SPX and NDX keep rallying as you predicted, RUT is not participating much and most of the stocks other than major stocks are not rising with the index. Does that concern you? When do you think RUT will participate in the rally in significant way? Does it have to wait until COVID second wave is resolved in some way or after the second quarter reports are out?

A: Thank you, technology (XLK ETF) has indeed reached new 2020 highs yesterday, and it’s leading the index higher. In a sign of confirmation, semiconductors are also challenging their early June highs.

Russell 2000 (IWM ETF) has been indeed underperforming since the March 23 bottom. But the caption says it all – both indices have been climbing higher nonetheless. Of course, the S&P 500 outlook would be more bullish if e.g. IWM ETF traded also above its 200-day moving average.

Given the unfolding S&P 500 upleg and recovering risk appetite (see e.g. the PHB:$DJCB ratio, or the room for growth in XLF:XLU and XLY:XLP), I think it’s a question of time when Russell 2000 breaks above its 200-day average too.

But this isn’t strictly about the underperformance for any S&P 500 investor to get spooked by. I would focus on whether I see signs of distribution in the IWM ETF. There are none currently.

If I saw IWM ETF weakening while the individual stock heavyweights in the S&P 500 went higher still, that would be concerning. That’s because once the smallcaps roll over to the downside, the S&P 500 would follow eventually as the generals wouldn’t just prop it up indefinitely. And this isn’t happening.

I think the Covid-19 second wave fear is a distraction – smallcaps can rise regardless. Any policy missteps would be more concerning for small- and medium-sized businesses. The same goes for the Q2 earnings and the usual games around bringing down previously upbeat expectation in order to have a better chance to exceed them. In other words, it’s the P that counts for more in the P/E ratio.

Summary

Summing up, Tuesday’s decline in the S&P 500 was indeed merely of short-term nature, and the credit markets tentatively support the stock upswing to go on. Market breadth isn’t at daily extreme readings, emerging stocks are outperforming, and the dollar isn’t an obstacle to further stock gains. I look for the breakout above short-term resistance formed by the mid-June tops to succeed shortly as the rally’s internals including technology, semiconductors and risk-on metrics are improving.

I encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

For a look at all of today’s economic events, check out our economic calendar.

 

Thank you.

Monica Kingsley
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

All essays, research and information found above represent analyses and opinions of Monica Kingsley and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Monica Kingsley and her associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Ms. Kingsley is not a Registered Securities Advisor. By reading Monica Kingsley’s reports you fully agree that she will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Monica Kingsley, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Asia-Pacific Indexes Up Across the Board Led by Gains in China

The major Asia-Pacific stock indexes were higher on Thursday, led by fresh gains in China. European shares are also rising following a two-day setback. The price action indicates that investors are looking past simmering U.S.-China tensions and renewed coronavirus lockdowns to upcoming company earnings, hoping that global stimulus efforts will yield upbeat outlooks.

On Thursday, the Nikkei 225 Index settled at 22529.29, up 90.64 or +0.40%. Hong Kong’s Hang Seng Index finished at 26210.16, up 80.98 or +0.31% and South Korea’s KOSPI Index closed at 2167.90, up 9.02 or +0.42%.

China’s Shanghai Index settled at 3450.59, up 47.15 or +1.39% and Australia’s S&P/ASX 200 Index finished at 5955.50, up 35.20 or +0.59%.

COVID-19 Update

The number of cases in the U.S. surpassed the 3 million mark, according to Johns Hopkins University. As cases and deaths rise, data compiled by Apple Maps shows driving activity is slowing down across the country, which could be a warning sign for the economic comeback.

Globally, more than 11.88 million people have been infected while at least 545,398 lives have been taken, according to data compiled by Johns Hopkins University.

China Reports Inflation Data

In fresh inflation data out of China early in the session, the country’s producer price index was down 3% year-on-year in June, compared to expectations for a 3.2% decline according to analysts polled by Reuters.

The consumer price index, meanwhile, fell in line with Reuters-polled expectations, rising 2.5% year-on-year for the month.

Australian Share Market Closes Higher

The Australian share market closed higher, after shares in Afterpay led a rally among tech stocks, while mining and energy stocks also boosted the market.

Mining and energy stocks led the broad-based rally. Technology shares surged, led by buy-now, pay-later operators Afterpay and Zip Co.

Corporate News

Rio Tinto said more than 2,000 jobs would go in New Zealand, as it announced plans to close its aluminum smelter in the country because of high power prices.

Meanwhile, Afterpay shares hit a fresh record high above $75 following an upgrade from Morgan Stanley. Analysts there raised their price target on the stock to $101, saying the company’s latest earnings were much stronger than expected.

For a look at all of today’s economic events, check out our economic calendar.

China Blue Chip Index Hits 5-year High; Australian Shares Tumble as Borders Close

The major Asia-Pacific stock indexes finished mostly higher on Monday with some scaling four-month peaks as investors bet heavily on a revival in Chinese activity to sustain global growth. MSCI’s broadcast index of Asia-Pacific shares outside Japan climbed 1.5% to its highest since February.

Even more impressive was a jump in Chinese blue chips which surged nearly 6.0%, on top of a 7% gain last week, to their loftiest level in five years.

On Monday, Japan’s Nikkei 225 Index settled at 22714.44, up 407.96 or +1.83%. Hong Kong’s Hang Seng Index finished at 26339.16, up 966.04 or +3.81% and South Korea’s KOSPI Index closed at 2187.93, up 35.52, up 1.65%.

In China, the Shanghai Index settled at 3332.88, up 180.07 or +5.71% and Australia’s S&P/ASX 200 Index finished at 6014.60, down 43.30 or -0.71%.

China’s Blue Chip Vault to 5-year High on Hopes of Economic Recovery, Policy Support

China stocks closed higher for a fifth straight session on Monday, extending a robust rally, led by financial shares on hopes of a quick economic recovery, Beijing’s continued reforms in the capital markets and ample liquidity, Reuters reported.

The blue-chip CSI300 index closed up 5.7% at 4,670.09 points, its highest value since June 25, 2015, while the Shanghai Composite Index climbed to its highest since March 2018. The CSI300 also posted its biggest one-day gain since February 25, 2019, while SSEC logged its best session since July 9, 2015.

“China has become a safe haven for investors now, as the recent coronavirus outbreak in Beijing helps investors realize the impact from a second wave of outbreak, if any, in the country would be very limited,” said Zhang Chengyu, vice general of Beijing-based Shiji Hongfan Asset Management Company.

“The rally now is just the beginning of a strong rising trend, and more money would pour into the A-share market,” Zhang added.

Hong Kong Stocks Track Mainland Gains, End at Over 4-Month High

Hong Kong shares closed at a more than four-month high on Monday, tracking equities in the mainland.

The Hang Seng Index rose 3.81%, while the China Enterprises Index gained 4.7%. The sub-index of the Hang Seng tracking energy shares rose 3.9%, while the IT sector rose 1.05%; the financial sector ended 4.85% higher and the property sector rose 4.21%.

Border Closures Hurt Share Market

The Australian stock market closed lower on Monday as state border closures with Victoria sparked fear of a second wave that could damage the country’s economic rebound.

Monday’s slight market slump comes off the back of a Deloitte Access Economics report, which flagged economic growth would contract by 3 percent in 2020 as a result of the COVID-19 shutdown.

Major bank shares made little movement throughout the day. The energy and material sectors also suffered declines. Additionally, refreshed lockdowns on travel also impacted the share price performance of Qantas.

For a look at all of today’s economic events, check out our economic calendar.

Chinese Factory Activity Impresses, Japan’s Tankan Survey Worsens, First Arrest in Hong Kong

The major Asia-Pacific stock indexes finished mixed, but mostly higher on Wednesday as investors shrugged off Hong Kong’s first arrest under China’s new national security law and rapidly rising COVID-19 infections. Investors were influenced mostly by a private survey that showed better-than-expected Chinese factory activity. Shares in Australia and China finished higher, while prices fell in Japan and South Korea. Hong Kong was closed.

At 07:26 GMT, Japan’s Nikkei 225 Index settled at 22121.73, down 166.41 or -0.75%. South Korea’s KOSPI Index closed at 2106.70, down 1.63 or -0.08%.

In China, the Shanghai Index settled at 3025.98, up 41.31 or +1.38% and Australia’s S&P/ASX 200 Index closed at 5934.40, up 36.50 or +0.62%.

Hong Kong Makes First Arrest Under China’s New National Security Law

Hong Kong police announced on Wednesday that they have made their first arrest since China’s national security law came into force. The contentious National Security Law was passed on Tuesday and took effect hours later.

It stipulates that a person who acts with a view to “undermining national unification” of Hong Kong with the mainland faces punishment of up to lifetime, depending on the severity of the offense.

Under the new law, many of Hong Kong’s protests that took place last year would be punishable by law.

US COVID-19 Infections Continue to Surge, Threatening the Recovery

The U.S. recorded 47,000 infections on Tuesday, its biggest single-day spike since the pandemic began. U.S. infection rates have surged over the past few weeks with some states reimposing restrictions on business and personal activity.

Coronavirus cases more than doubled in 14 U.S. states last month, a Reuters analysis showed, and fears are growing that the caseload could prompt fresh lockdowns.

“Clearly we are not in total control right now,” the country’s top infectious disease expert, Anthony Fauci, told a Senate committee on Tuesday, adding that cases could increase by as much as 100,000 daily if the outbreak is not contained.

The surge has prompted California, Texas and Florida to shut recently re-opened bars in the last few days, while Australia has locked down parts of its second-biggest city, Melbourne, to try to stop a spike in cases there.

Asia-Pacific Economic News

The latest boost to sentiment came from Chinese factory activity gathering steam in June, with the Caixin/Markit manufacturing PMI rising to 51.2 compared with expectations for 50.5. The official manufacturing PMI released Tuesday also showed factory activity in China expanding in June.

The Bank of Japan’s quarterly Tankan survey released Wednesday showed a worsening business mood in the country. The headline index for large manufacturers’ sentiment worsened to -34 in June – its lowest level since June 2009, according to Reuters – as compared with -8 in March.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Stocks Tumble; Australian Shares Fall to 2-Week Low, Japan Reports Dismal Retail Sales

The major Asia-Pacific stock indexes finished lower on Monday amid a growing number of global coronavirus cases. Investors reacted to new reports showing a spike in COVID-19 cases in the United States, Australia and China on concerns that the surge in cases could curtail the reopening of economies and lead to renewed restrictions and lockdowns.

In Japan, the Nikkei 225 Index settled at 21995.04, down 517.04 or -2.30%. Hong Kong’s Hang Seng Index closed at 24301.28, down 248.71 or -1.01% and South Korea’s KOSPI Index finished at 2093.48, down 41.17 or -1.93%.

In Australia, the S&P/ASX 200 Index settled at 5815.00, down 89.10 or -1.51% and China’s Shanghai Index finished at 2961.52, down 18.03 or -0.61%.

Coronavirus Update

Globally, more than 500,000 lives have been taken by the coronavirus as the number of infections crosses 10 million, according to data compiled by Johns Hopkins University. In the U.S., coronavirus cases recently surged by more than 45,000 in a day. The recent spike in cases stateside has led some states such as Texas and Florida to re-close some businesses.

Japan’s Retail Sales Extend Slump as Coronavirus Curbs Keep Shoppers Away

Retail sales in Japan tumbled at a double-digit pace for the second straight month in May as the coronavirus pandemic and lockdown measures delivered a heavy blow to consumer confidence and economic recovery prospects, Reuters reported.

Retail sales fell 12.3% in May from a year earlier. The decline followed a 13.9% drop in April, which was the biggest fall since March 1998, and was worse than an 11.6% fall forecast by economists in a Reuters poll.

Australian Shares Hit 2-Week Low as Virus Surge Weighs

Australian shares kicked off the week on a lackluster note to close 1.5% lower on Monday, with financials and energy stocks leading the declines, as a global upsurge in COVID-19 infections sent traders towards a risk-off mode, Reuters reported.

Weighing the most on the benchmark was the 1.6% drop in financial stocks as the “Big Four” banks lost between 1.5% and 2.5%.

Australia’s energy sub-index dropped up to 3.9% to its lowest in more than a month as oil prices slid for a second straight session.

A sub-index of miners also dragged the index lower, pressured by a dip in iron ore prices. Bucking the trend, gold stocks gained 0.9%, helped by a rise in bullion as investors opted for safe-haven assets.

China to Impose Visa Restrictions on US Individuals over Hong Kong

Beijing said on Monday it will impose visa restrictions on U.S. individuals with “egregious conduct” on Hong Kong-related issues, mirroring U.S. sanctions against unnamed Chinese officials deemed responsible for curbing freedoms in the city.

The announcement comes as the top decision-making body of China’s parliament deliberates a draft national security law for Hong Kong that pro-democracy activists in the city fear will be used to eliminate dissent and tighten Beijing’s control.

“The U.S. is attempting to obstruct China’s legislation for safeguarding national security in the HK SAR (Hong Kong Special Administrative Region) by imposing the so-called sanctions, but it will never succeed,” he told reporters.

“In response…China has decided to impose visa restrictions on U.S. individuals with egregious conduct on HK related issues.”

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Markets: Hong Kong Down Ahead of New US Sanctions on China; Australia’s Quantas Plunges Over 9%

The major Asia Pacific stock indexes closed mostly higher on Friday with shares in Hong Kong bucking the trend. Investors primarily followed the lead set by Wall Street on Thursday.

U.S. shares traded sideways to lower throughout the session before surging during the last hour of trading. Earlier gains were capped by concerns over the spread of COVID-19 in the U.S., but late in the session prices rose on the back of bank stocks after U.S. banking regulators rolled back post-crisis restrictions to allow banks to increase investments in certain funds and vehicles.

On Friday, Japan’s Nikkei 225 Index settled at 22512.08, up 252.29 or 1.13%. Hong Kong’s Hang Seng Index finished at 24549.99, down 231.59 or -0.93% and South Korea’s KOSPI Index closed at 2134.65, up 22.28 or +1.05%.

China’s Shanghai Index settled at 2979.55, up 8.93 or +0.30% and Australia’s S&P/ASX 200 Index finished at 5904.10, up 86.40 or +1.49%.

Banks Rally on Banking Regulation Rollback

The Office of the Comptroller of the Currency on Thursday approved changes to the so-called Volcker Rule, which prevented banks from investing their own money in hedge funds and private equity funds. The regulators also scrapped a requirement that lenders set aside cash for derivatives trades between different affiliates of the same firm.

Fed Places New Restrictions on Banking Industry

The U.S. Federal Reserve on Thursday placed new restrictions on the banking industry after its annual stress test found that several banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic. As a result, banks have to suspend share buyback programs and leave dividend payments at current levels for the third quarter.

Australia’s Quantas Airways Shares Plummet Over 9%

In corporate news, shares of Australian airlines Qantas Airways plummeted 9.07% after the firm announced it had completed a share placement to institutional investors worth approximately 1.36 billion Australian Dollars ($936.83 million).

On Thursday, the firm had announced plans to reduce its pre-crisis workforce by at least 6,000 roles as part of steps to recover from the coronavirus pandemic.

Hong Kong Shares Slide as Pandemic, US Sanction Pressures Weigh

Hong Kong shares ended lower on Friday, after U.S. lawmakers moved closer to sanctioning people and companies they consider China’s accomplices in curbing the city’s autonomy, while new coronavirus outbreaks globally also soured the sentiment.

Investors turned cautious as Chinese authorities could pass that security law during a June 28-30 meeting, amid mixed signals in global markets, CHIEF Securities said in a note.

Financial markets in mainland China were shut for the Dragon Boat Festival, while Hong Kong markets were closed for it on Thursday, when global equities slipped on worries of further coronavirus outbreaks across the world.

The U.S. Senate passed a legislation on Thursday that would sanction people or companies it deems in support of China’s attempt to restrict Hong Kong’s autonomy, pushing back against Beijing’s new security law for the city.

U.S. Imposes Visa Restrictions on Chinese Officials Over Hong Kong Autonomy

U.S. Secretary of State Mike Pompeo said on Friday the United States was imposing visa restrictions on Chinese Communist Party officials believed responsible for restricting freedoms in Hong Kong.

“Today, I am announcing visa restrictions on current and former CCP officials who are believed to be responsible for, or complicit in, undermining Hong Kong’s high degree of autonomy,” Pompeo said in a statement, which did not name those targeted.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Mostly Higher as Investors Assess Impact of Second-Wave COVID-19 Outbreaks

The major Asia-Pacific stock indexes closed mixed but mostly higher on Wednesday as investors remained doggedly upbeat on the outlook for a re-opening of the global economy even as cases of the coronavirus looked to be accelerating to new peaks.

Weakness prevailed in Hong Kong with the Hang Seng Index falling after Tencent’s stock slipped 1.33% after touching a new record high earlier in the session. Meanwhile in South Korea, the KOSPI rose 1.42%, led by a 2.92% surge in Samsung Electronics and a 2.26% advance by chipmaker SK Hynix.

On Wednesday, Japan’s Nikkei 225 Index settled at 22534.32, down 14.73 or -0.07%. Hong Kong’s Hang Seng Index finished at 24781.58, down 125.76 or -0.50% and South Korea’s KOSPI Index closed at 2161.51, up 30.27 or 1.42%.

China’s Shanghai Index settled at 2979.55, up 8.93 or +0.30% and Australia’s S&P/ASX 200 Index finished at 5965.70, up 11.30 or +0.19%.

Stateside Coronavirus Situation Rattles Investors

Investors were a little tentative throughout the session on Wednesday after White House health advisor Dr. Anthony Fauci warned Tuesday that parts of the U.S. are beginning to see a “disturbing surge” of Covid-19 cases.

In a hearing before the House Energy and Commerce Committee, Fauci said he is “quite concerned” about the rise in coronavirus cases in states that “reflect an increase in community spread.” He did also say, however, that states with growing coronavirus outbreaks may not need to do an “absolute shutdown.”

Hong Kong Stocks End Lower as Energy Weighs

Hong Kong stocks fell on Wednesday, weighed down by energy companies, while signs of an increase in coronavirus cases added to pressure.

The sub-index of the Hang Seng tracking energy shares dipped 1.9%, while the IT sector rose 0.25%, the financial sector ended 0.38% lower and the property sector dipped 0.55%.

The top gainer on the Hang Seng was AAC Technologies Holdings Inc, which gained 5.44%, while the biggest loser was CITIC Ltd, which fell 2.61%.

Traders were primarily driven by the news that China will press the brakes on crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak, analysts and sources told Reuters.

China Stocks Set for Weekly Gains on Upbeat Data, Beijing’s Reforms

China stocks rose on Wednesday, set to close the shortened three-session week on a firmer note, as investors cheered improving data from key economies and Beijing’s latest reforms in its capital markets. The Shenzhen’s tech-heavy start-up board index advanced 2.3% so far this week, poised for its fifth straight weekly gain.

China’s stock market will be closed on Thursday and Friday for the Dragon Boat Festival.

Investors have been paying more attention to Beijing’s reforms in its capital markets, rather than to other factors, including the Sino-U.S. trade tensions and the coronavirus outbreak, which has been brought under control now, said Yan Kaiwen, an analyst with China Fortune Securities.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Settle Mixed on Second Wave Concerns

The major Asia-Pacific stock indexes finished mixed but mostly lower on Monday as investors reacted to a rise in the number of coronavirus cases with most of the surge occurring stateside. The price action suggests investors are taking a cautious approach as they deal with the conflict between exuberance over the reopening of several economies and the real danger of second wave infections risk.

On Monday, Japan’s Nikkei 225 Index settled at 22437.27, down 41.52 or -0.18%. Hong Kong’s Hang Seng Index finished at 24515.23, down 128.66 or -0.52% and South Korea’s KOSPI Index closed at 2126.73, down 14.59 or -0.68%.

China’s Shanghai Index settled at 2965.27, down 2.36 or -0.08% and Australia’s S&P/ASX 200 Index closed at 5944.50, up 1.90 or +0.03%.

Rising Number of Coronavirus Cases in the US

Investors reacted to a jump in the number of COVID-19 cases in the U.S., with more than 30,000 new infections reported on Friday and Saturday – the highest daily totals since May 1 – according to data compiled by Johns Hopkins University.

Meanwhile, in China, an official said Sunday that Beijing is capable of screening almost 1 million people a day for the coronavirus. That development came in reaction to a recent cluster of infections that was found in the city.

China Holds Rates Steady

China kept its benchmark lending rate unchanged on Monday, with the 1-year loan prime rate left at 3.85%. The 5-year loan prime rate was also kept steady at 4.65%.

The move left the benchmark lending rate unchanged for the second straight month at its June fixing, matching market expectations, after the central bank kept borrowing costs on medium-term loans steady last week.

China’s Startup Board Index Hits 4-1/2-Year High on Fresh Reforms

China’s startup board index hit its highest in more than four years on Monday, as investors cheered Beijing’s fresh reforms in its capital markets to help bolster the world’s second-largest economy.

The start-up board ChiNext Composite Index climbed 1.01%, its highest since January 7, 2016.

Meanwhile, over the weekend, China said it would revamp its benchmark equity index by introducing more high-tech strength and removing loss-making companies.

The inclusion of STAR stocks in the SSEC will make its structure more reasonable and representative, as STAR companies represent the development direction of China’s economy, Ma Wenyu, analyst at Shanxi Securities noted in report.

The reforms would bode well for the equities market, while securities and tech stocks would benefit first, Ma added.

Tokyo Shares Dip on Worries Over Rising Coronavirus Cases

Japanese shares edged lower on Monday, moving in a narrow range, as worries about the growing number of coronavirus infections across the world kept investors on edge.

The World Health Organization reported a record increase in global coronavirus cases on Sunday, with the biggest rise in North and South America.

Sentiment was also weighed by iPhone maker Apple Inc. announcing a temporary shutdown of its 11 stores in Florida, Arizona, South Carolina and North Carolina on Friday.

The announcement hit Apple-related stocks in Japan, with Alps Alpine, Murata Manufacturing Co. Ltd. and Rohm Co. Ltd. Falling between 0.67% and 1.25%.

Some market players said the rising daily infections in Tokyo dampened hopes of Japan’s economic recovery, others noted that its impact was small.

“It is not regarded as a huge risk, at least in Japanese markets, since Japan is still far from an outbreak that could lead to restrictions being imposed again,” said Yutaka Masushima, market analyst at Monex Securities in Tokyo.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Stocks Retreat as Second Wave Fears Grows; Chinese Economic Data Misses Expectations

The major Asia-Pacific stock indexes tumbled on Monday and oil prices trended lower as fears of a second wave of coronavirus infections in Beijing sent investors scurrying for safe-haven assets while underwhelming data from China weighed on investor sentiment.

Monday’s losses follow last week’s volatile sessions which saw the strong rally in global equities since late March, fueled by central bank and fiscal stimulus as countries gradually lifted restrictions put in place to curb the spread of the novel coronavirus, come to a screeching halt.

At 05:00 GMT, Japan’s Nikkei 225 Index is trading 21987.94, down 317.54 or -1.42%. Hong Kong Hang Seng Index is at 24150.85, down 150.53 or -0.62% and South Korea’s KOSPI Index is trading 2115.64, down 16.66 or -0.78%.

China’s Shanghai Index is trading 2919.48, down 0.26 or -0.01%. Australia’s S&P/ASX 200 Index settled at 5804.30, down 43.50 or -0.74%.

The price action suggests investors are being very cautious as they put into perspective that the COVID-19 issue has not been resolved yet.

Risk sentiment took a knock after Beijing recorded dozens of new COVID-19 cases in recent days, all linked to a major wholesale food market. Authorities have closed the center and locked down nearby housing districts.

Meanwhile, investors are also fretting over a spike in cases in the United States where more than 25,000 new cases were reported on Saturday.

Economic Data From China Did Little to Revive Risk Appetite

China’s industrial output expanded 4.4% in May from a year earlier but the gain was less than expected, official data showed on Monday, suggesting the economy is still struggling to get back on track after the coronavirus crisis.

Analysts polled by Reuters had expected growth to quicken slightly to 5.0% from a year earlier as more businesses resumed production, following a rise of 3.9% in April, the first expansion since the virus emerged from China late last year.

Retail sales fell 2.8% on-year, more than a predicted 2.0% decline, but pointing to some signs of recovery in consumer demand after a 7.5% drop in April.

Sales have fallen for four straight months as shops, restaurants and other crowded places closed during the pandemic. Though strict anti-virus measures have been relaxed, consumers remain wary.

Fixed asset investment fell 6.3% in January-May from the same period last year, compared with a forecast 5.9% fall and a 10.3% decline in the first four months of the year.

Private sector fixed-asset investment, which accounts for 60% of total investment, fell 9.6% in January-May, compared with a 13.3% decline in the first four months of the year.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares End Lower as Volatility Looms

Stocks in Asia Pacific retreated for a second session on Friday, led by a more than 2% drop in South Korea. The selling was driven by the overnight rout on Wall Street amid fears of a second wave resurgence of the coronavirus pandemic.

Volatility has moved to the forefront with two trains of thought likely to fuel a two-sided trade that could lead to whip-saw action. One group of investors see the move as a positive, designed to alleviate some of the upside pressure. The other sees the steep sell-off as the start of a period of uncertainty driven by more cautious investors.

On Friday, Japan’s Nikkei 225 Index settled at 22305.48, down 167.43 or -0.75%. Hong Kong’s Hang Seng Index finished at 24301.38, down 178.77 or -0.73% and South Korea’s KOSPI Index closed at 2132.30, down 44.48 or -2.04%.

In China, the Shanghai Index settled at 2919.74, down 1.16 or -0.04% and Australia’s S&P/ASX 200 Index finished at 5847.80, down 112.80 or -1.89%.

A Pullback is Needed

“The market needed a breather,” Shaw and Partners’ Senior Investment Adviser Adam Dawes told CNBC’s “Street Signs” on Friday. “We’re really confident and comfortable with a pullback because … it’s somewhat needed going forward.”

“For the Australian market and for Asia markets this is a really good pullback,” Dawes said. “It’s now starting to give us some good opportunities to pick up some stocks that we’ve missed out previously.”

Or a New Period of Caution Begins

“Yesterday’s new infection numbers brought the total number of US COVID-19 cases to above two million, with a number of localized hotspots – 18 states are seeing an increase, including Arizona, Florida, Texas and parts of California. And globally, Wednesday’s new case load of 135,000 is the highest daily tally to date,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, wrote in a note.

“Whether the latest COVID-19 news is fanning concerns about fresh lockdowns with all that entails for economic activity, or (and perhaps more realistic, in the US at least) a more extended period of cautious consumer behavior, it is doubtless a factor behind the sharp falls in stocks,” Attrill said.

China Stocks End Only Marginally Lower on Capital Market Reform Hopes

China stocks recouped earlier losses to finish only slightly lower on Friday, led by tech, as investors cheered Beijing’s pledge to push forward with capital market reforms, Reuters reported.

Investors in the A-Share market were encouraged after Beijing said it would publish reform policies for the Shenzhen start-up board to bolster its capital markets. The reforms are part of Beijing’s continued efforts to seek tech self-sufficiency following its launch of STAR Market last July.

Reuters also reported that China will ensure the special funds allocated from the central government this year will reach city and county levels directly to support firms and residents in difficulties, vice finance minister Xu Hongcai told reporters on Friday.

For a look at all of today’s economic events, check out our economic calendar.

Asian Shares Tumble after Fed Challenges Investor Optimism; Aussie Shares Plunge 3%

The major Asia-Pacific stock indexes were down across the board on Thursday after the U.S. Federal Reserve challenged investor optimism with a gloomy prediction the U.S. economy would shrink 6.5% in 2020 and unemployment would still be at 9.3% at year’s end. Still, stock losses were modest given the scale of their recent rise.

Although the downbeat economic outlook from the U.S. Federal Reserve stoked speculation it would have to add to already historic levels of stimulus to safeguard recovery, investors still decided to book profits. In this case, the promise for more stimulus was interpreted as bearish because it may be an indication that the economy is not on the fast-track to recovery as investors have hoped.

On Thursday, Japan’s Nikkei 225 Index settled at 22472.91, down 652.04 or -2.82%. Hong Kong’s Hang Seng Index finished at 24480.15, down 569.58 or -2.27% and South Korea’s KOSPI Index closed at 2176.78, down 18.91 or -0.86%.

In China, the Shanghai Index settled at 2920.90, down 22.86 or -0.78% and in Australia, the S&P/ASX 200 Index finished at 5960.60, down 187.80 or -3.05%.

Fed Chair Jerome Powell:  ‘Not Even Thinking about Raising Rates’

Shortly before the Fed announcements, data showed core U.S. consumer prices fell for a third straight month in May, the longest stretch of declines on record.

As a result, Fed Chair Jerome Powell said he was “not even thinking about raising rates”. Instead, he emphasized recovery would be a long road and that policy would have to be proactive with rates near zero out to 2022.

The Fed did not commit to any new actions at this meeting with most of the focus on downside risks and uncertainty in the economy. This assessment seemed to splash water on the V-Shaped recovery theory being pushed by stock market investors.

Furthermore, it left the door open for further stimulus measures, perhaps as early as September. Policymakers did not indicate they would try to flatten the yield curve, but comments indicate they may be open to moving to some form of interest rate caps.

Australian Shares Plunge More Than 3 Percent

The Australian stock market was notably lower on Thursday after the Federal Reserve projected a sharp contraction for the U.S. economy this year due to the coronavirus pandemic and indicated that interest rates are likely to remain at current near-zero levels through 2022.

In addition, the Organization for Economic Cooperation and Development or QECD said the global economy is undergoing the deepest recession since the Great Depression in the 1930s due to the COVID-19 pandemic.

The big four banks were among the major losers. ANZ Banking, National Australia Bank and Westpac were lower by 3.1 percent to 3.4 percent, while Commonwealth Bank was lower by more than 2 percent.

For a look at all of today’s economic events, check out our economic calendar.

Asia Pacific Shares Settle Mixed on China Inflation Data Miss, Jitters Ahead of Fed Announcements

The major Asia-Pacific stock indexes finished mixed on Wednesday with some edging higher a 10th consecutive session, but upside momentum was a struggle as doubts about the global recovery from the pandemic returned ahead of the U.S. Federal Reserve meeting later in the day stateside.

The ebb and flow movement in the indexes put a lid on some of the indexes after two weeks of gains that were fueled by growing optimism over a swift recovery from the coronavirus pandemic by the global economy.

On Wednesday, Japan’s Nikkei 225 Index settled at 23124.95, up 33.92 or +0.15%. South Korea’s KOSPI Index finished at 2195.69, up 6.77 or +0.31% and Hong Kong’s Hang Seng Index is trading 25042.53, down 14.69 or -0.06%.

China’s Shanghai Index settled at 2943.75, down 12.36 or -0.42% and Australia’s S&P/ASX 200 Index finished at 6148.40, up 3.50 or +0.06%.

China Factory Gate Deflation Deepens on Global Demand Slump

China’s producer prices fell by the sharpest rate in more than four years, underscoring pressure on the manufacturing sector as the COVID-19 pandemic reduces trade flows and global demand, Reuters reported.

The producer price index (PPI) in May fell 3.7% from a year earlier, the National Bureau of Statistics (NBS) said in a statement on Wednesday, the sharpest decline since March 2016. That compared with a 3.3% drop tipped by a Reuters poll of analysts and a 3.1% fall in April.

China CPI – Weakest Reading Since March 2019

China’s consumer price index (CPI) rose 2.4% from a year earlier – the weakest reading since March 2019 – compared with a 3.3% increase in April, as food prices continued to ease. Analysts had projected a 2.7% rise.

That was largely due to slowing food prices, which rose 10.6% in May from a year earlier, versus a 14.8% rise in April. Food price increases in May were led by an 81.7% rise in pork prices, compared with a 96.9% jump previously, the data showed.

Core Inflation – which excludes food and energy costs – remained benign last month at 1.1%, unchanged from April’s rise.

Japan’s Machinery Orders, Wholesale Prices Sink as Pandemic Hits Business Spending

Japan’s machinery orders slumped in April at their quickest pace in nearly two years, as a drop in demand and company profits caused by the coronavirus pandemic paralyzed business spending.

Separate data showed May wholesale prices fell at the fastest annual pace in nearly four years, keeping alive market fears Japan may slide back into deflation.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Mostly Higher; Nikkei Pressured by Stronger Yen, Aussie Shares Close at 3-Month High

The major Asia-Pacific shares finished mostly higher on Tuesday, following Wall Street higher. The U.S. benchmark S&P 500 Index erased earlier losses and entered positive territory for the year. The rally was primarily driven by the lifting of coronavirus lockdowns in many countries that fed investor hopes of a relatively quick global economic recovery. Shares in Japan finished lower while Australian equities soared over two-percent.

On Tuesday, Japan’s Nikkei 225 Index settled at 23091.03, down 87.07 or -0.38%. South Korea’s KOSPI Index finished at 2188.92, up 4.63 or +0.21% and Hong Kong’s Hang Seng Index closed at 25233.85, up 457.08 or +1.84%.

China’s Shanghai Index settled at 2956.11, up 18.34 or +0.62% and Australia’s S&P/ASX 200 finished at 6144.90, up 146.20 or +2.44%.

Firmer Japanese Yen Weighs on Nikkei 225 Index

Japanese shares ended lower on Tuesday, slipping from a three-and-a-half-month high hit in the previous session, as a firmer Yen weighed on the market, with automakers and chip-related companies leading the decline.

Highly cyclical iron and steel, sea transport and non-ferrous metals were the worst three performing sectors on the main bourse.

As a firmer yen hurts Japanese manufacturers’ profits made abroad when repatriated, shares of export-oriented automakers came under pressure, with Nissan Motor tumbling 4.8% and Mazda Motor falling 3.1%.

Australia Shares Finish at 3-Month High on Swift Economic Turnaround Hopes

Australian shares on Tuesday settled at their highest in three months, with financials leading the gains, as hopes of a speedy economic rebound from the coronavirus-triggered slump bolstered risk appetite.

A measure of Australian business conditions showed that activity and confidence last month bounced back from lows in April as virus-induced curbs are rolled back and the economy restarts, though the survey’s stayed in recessionary territory overall.

Heavyweight financials led gains on the benchmark, rising 4.8% with top lenders Commonwealth Bank of Australia and Westpac Banking Corp. leading the charge.

The banks are relieved that the economy is not doing as badly as initially feared and that investors are hunting for bargains while they still trade at lows, said Henry Jennings, senior analyst at Marcustoday, Reuters reported.

Other News

In corporate news out of Hong Kong, the South China Morning Post reported Tuesday that the Hong Kong government will bail Cathay Pacific out with 30 billion Hong Kong dollars ($3.87 billion) in loans and a direct stake. Trading of the Cathay Pacific’s shares in Hong Kong were earlier halted on Tuesday.

Shares of Samsung Group companies in South Korea were mixed on Tuesday afternoon as they shed earlier gains. Investors reacted to the news that a court in Seoul rejected an arrest warrant on the conglomerate’s de facto leader, Lee Jae-yong, according to local news agency Yonhap.

For a look at all of today’s economic events, check out our economic calendar.

Asian Stocks Bump Against 3-Month Highs; China Exports Contract in May

The major Asia-Pacific stock indexes finished higher on Monday on the back of Friday’s surprisingly robust U.S. jobs. The unexpected recovery in U.S. employment lifted hopes of a quicker global economic revival after many weeks of lockdowns aimed at controlling the coronavirus pandemic.

Although some analysts cast doubts over the validity of the U.S. employment numbers, the concerns were not strong enough to derail the risk driven stock market rally. Some analysts looked to the bright side, however.

“As we get more and more data that perhaps confirms that the economy is really on the mend and the second wave of infections may not be very severe, then that will boost confidence even further,” said Vasu Menon, senior investment strategist at OCBC Bank Wealth Management.

On Monday, Japan’s Nikkei 225 Index settled at 23178.10, up 314.37 or +1.37%. Hong Kong’s Hang Seng Index finished at 24783.95, up 13.54 or +0.05% and South Korea’s KOSPI Index closed at 2184.29, up 2.42 or +0.11%.

In China, the Shanghai Index settled at 2937.77, up 6.97% or +0.24% and Australia’s S&P/ASX 200 Index closed at 5998.70, up 6.90 or +0.12%.

US Jobs Report Underpins Markets

Monday’s wave of optimism was triggered by U.S. Non-Farm Payrolls, which unexpectedly rose by 2.509 million jobs last month – versus consensus estimates of a fall of 8 million jobs after a record plunge of 20.687 million in April.

The Labor Department’s closely watched employment report also showed a surprise fall in the jobless rate to 13.3% last month from 14.7% in April, a post-World War II high.

Fresh Chinese Data Reveals Coronavirus Impact on Economy

Chinese trade data published on Sunday also revealed the impact from the coronavirus crisis.

Exports contracted in May as global lockdowns continued to sink demand, while a sharper-than-expected fall in imports pointed to mounting pressure on manufacturers as world growth stalls, according to Reuters. Still, the country posted a record trade surplus last month as imports dropped.

Revised Japanese GDP Data Shows Smaller Contraction

In Japan, revised gross domestic product data for the first quarter showed the economy contracted less than initially thought, though the outlook suggested the nation was facing its worst postwar slump due to the pandemic, Reuters reported.

Japanese markets hardly budged after the revised data as traders have already priced in a steep economic downturn in the current quarter. Economists are forecasting an annualized GDP contraction of more than 20% in the current quarter.

Despite the revised data, most analysts maintained their pessimistic outlook for the economy.

“The upward revision to Q1 GDP displayed in the revised estimate is cold comfort given that output is plummeting this quarter. We expect GDP to fall by another 9% this quarter,“ said Tom Learmouth, an economist at Capital Economics.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Markets Close Higher; South Korean KOSPI up 49.45% from March’s 52-Week Low

The major Asia-Pacific markets closed higher on Friday while posting their biggest weekly rise in over eight years. Several key regional indexes have bounced back strongly following a historic period of volatility and uncertainty in March, as the world grappled with a rapidly spreading coronavirus pandemic that left many economies on pause as lockdown measures were put in place.

Investors said a positive outlook for the global economy helped underpin the indexes, but the European Central Bank’s (ECB) surprise of more stimulus further encouraged investors to bet more aggressively on a global rebound. The ECB on Thursday announced an increase in its Pandemic Emergency Purchase Programme by 600 billion Euros.

Gains in Asia were likely limited by light-profit-taking ahead of Friday’s nonfarm payrolls data, which is expected to show further deterioration in the U.S. jobs market. Ahead of the latest labor data, the Labor Department said 1.877 million Americans filed for unemployment benefits last week, higher than a Dow Jones estimate of 1.775 million.

On Friday, Japan’s Nikkei 225 Index settled at 22863.73, up 167.99 or +0.74%. Hong Kong’s Hang Seng Index finished at 24586.11, up 232.03 or +0.95% and South Korea’s KOSPI Index closed at 2181.87, up 30.69 or 1.43%.

China’s Shanghai Index settled at 2927.98, up 8.73 or +0.30% and Australia’s S&P/ASX 200 Index finished at 5998.70, up 6.90 or +0.12%.

Asia Pacific’s Major Markets Bounce Back Strongly Following Historic Period of Volatility and Uncertainty

Here’s a look at how other major stock indexes regionally have performed since touching their 52-week Low in March, as of their Thursday closing figures, compiled by CNBC with data from Refinitiv.

South Korea’s KOSPI:  +49.45%

Thailand’s SET Composite Index:  +45.6%

U.S. S&P 500 Index:  +42.0%

Japan’s Nikkei 225: +38.74%

Pan-European Stoxx 600 Index:  +36.37%.

Australia’s S&P/ASX 200:  +36.1%

Taiwan’s Taiex:  +33.67%

India’s Nifty 50:  +33.52%

Singapore’s Straits Time Index:  +22.59%

Hong Kong’s Hang Seng Index:  +15.27%

China’s Shanghai Composite:  +10.29%

From the looks of these numbers, it looks as if President Trump’s “country club buddies” aren’t the only ones “raking it in”. China is the big surprise, up only +10.29%, but then again their investors may have been distracted too much by the Wuhan virus to worry about creating wealth.

For a look at all of today’s economic events, check out our economic calendar.

Australian Shares Boosted by Fourth Stimulus Package; Retail Sales Post Historic Plunge

The major Asia-Pacific stocks indexes are trading mixed on Thursday with some challenging two-month highs as government stimulus expectations supported investor confidence in an economic recovery from the global coronavirus pandemic.

MSCI’s broadcast index of Asia-Pacific shares outside Japan rose 0.4%, earlier touching its highest level since March 9.

Shares in Australia rose 0.66% after the country’s prime minister unveiled a fourth stimulus package to repair the economy.

Chinese shares were little changed due to lingering worries about diplomatic tension between the United States and China.

At 05:55 GMT, Japan’s Nikkei 225 Index is trading 22649.20, up 35.44 or +0.16%. Hong Kong’s Hang Seng Index is at 24301.13, down 24.49 or -0.10% and South Korea’s KOSPI Index is trading 2153.46, up 6.46 or +0.30%.

China’s Shanghai Index is trading 2918.07, down 5.30 or -0.18% and Australia’s S&P/ASX 200 Index settled at 5983.00, up 41.40 or +0.70%.

Australia Launches $470 Million Stimulus Package for Construction Sector

Australia will give eligible residents A$25,000 ($17,323) to build or significantly renovate their homes, Prime Minister Scott Morrison said on Thursday, as Canberra moves to revive a construction sector badly affected by the coronavirus pandemic.

Dubbed HomeBuilder, the package worth A$680 million ($471 million) is Australia’s fourth economic stimulus package as it seeks to repair an economy that is now in its first recession in 29 years.

Morrison said the package would support jobs and allow people to build a family home, a long-held dream for many Australians.

Australian Retailers Suffer Record Sales Slump, Supports Grim Outlook for Second-Quarter GDP

Australian retail sales suffered a historic plunge in April while the trade surplus narrowed as the coronavirus battered the economy, leaving the nation facing its worst ever contraction in the current quarter.

Retail Sales slumped a seasonally adjusted 17.7% in April, their biggest on record, from an 8.5% jump in March, data from the Australian Bureau of Statistics (ABS) showed on Thursday.

China Stocks Slip on Sino-U.S. Tensions after Trump Administration Bars Flying to US

China stocks pared early gains Thursday due to concerns over rising Sino-U.S. tensions after the Trump administration barred Chinese passenger carriers to fly to the United States, Reuters reported.

U.S. President Donald Trump’s administration on Wednesday barred Chinese passenger carriers from flying to the U.S. starting on June 16, while the Civil Aviation Administration of China (CAAC) allowed more qualifying foreign carriers to fly into the mainland on Thursday.

The U.S. is also expected to designate at least four additional state-run Chinese media outlets as foreign embassies, increasing restrictions on their operations on American soil, Reuters reported.

For a look at all of today’s economic events, check out our economic calendar.

Asia Pacific Shares Rise on Hopes of Successful Reopening of Global Economy

The major Asia-Pacific stock indexes finished higher on Tuesday on the hopes of a successful reopening of the global economy as coronavirus containment measures are eased. However, gains may have been limited by simmering tensions between the U.S. and China. In other news, the Reserve Bank of Australia released interest rate and monetary policy statements.

On Tuesday, Japan’s Nikkei 225 Index settled at 22325.61, up 263.22 or +1.19%. Hong Kong’s Hang Seng Index finished at 23995.84, up 263.42 or 1.11% and South Korea’s KOSPI Index closed at 2087.19, up 22.11 or +1.07%.

China’s Shanghai Index settled at 2921.40, up 5.97 or +0.20% and Australia’s S&P/ASX 200 Index finished at 5835.10, up 15.90 or +0.27%.

World stock markets have rallied nearly 36% from March lows on hopes for a swift recovery from a pandemic that has killed nearly 375,000 people and crushed global growth as countries have shut down to try and slow the virus’s spread.

The week had begun with a surge in riskier currencies and global equities after President Trump’s response to China’s tightening grip on Hong Kong – with threats, not tariffs – was seen lowering the temperature of Sino-U.S. tension.

Worries Over Trade Deal Reduced by Encouraging PMI Data

A Bloomberg report on Monday said an order from China’s government to halt U.S. soybean purchases, though, again raised the spectre of damaging trade disagreements between Washington and Beijing. However, May Purchasing Managers Index (PMI) data in Asia, Europe and the U.S. pointed to a fragile but encouraging rebound in global manufacturing – driving hopes that the worst is over.

Reserve Bank of Australia Raises Optimism

In a statement released Tuesday announcing the Reserve Bank of Australia’s (RBA) decision to maintain its current policy settings, RBA Governor Philip Lowe said:  “Over the past month, infection rates have declined in many countries and there has been some easing of restrictions on activity.”

“If this continues, a recovery in the global economy will get under way, supported by both the large fiscal packages and the significant easing in monetary policies,” Lowe said.

For a look at all of today’s economic events, check out our economic calendar.