Shares rose and the dollar steadied at new highs on Wednesday, with overnight gains by Big Tech helping balance concerns that new COVID-19 restrictions to counter coronavirus infections will damage the economic recovery.
Renewed hopes of stimulus measures in Europe also came into play after surveys of private sector economic activity in September painted a gloomy picture for Europe, with rising COVID-19 cases leading to a downturn in services.
Technology shares were among the strongest gainers from the start in Europe following a rally overnight in U.S. heavyweights Amazon, Microsoft, and Apple, and a positive performance earlier of peers in Asia. Tech companies have been rare beneficiaries of lockdown measures, with more people working and shopping from home.
Nasdaq futures meanwhile built on Tuesday’s strong bounce to gain 0.2%. S&P 500 futures were 0.4% higher.
Carlo Franchini, head of institutional sales at Banca Ifigest in Milan, said that despite the gains the underlying mood remained highly cautions given uncertainty linked to the pandemic and its effect on the recovery. “The U.S. is the only market that’s riding on. Investors are interested only in big U.S. tech, even though they should look elsewhere if they took fundamentals into account,” he said.
In Britain, the recovery from the coronavirus lockdown lost some momentum this month, according to a PMI survey taken before Prime Minister Boris Johnson announced a new round of restrictions that could probably last six months.
“Risk-aversion on the back of new COVID-19 infections affecting Europe more directly remains an important factor this week,” UniCredit strategists said in a note. “This means that the USD is likely to remain firm in its role as preferred safe-haven currency,” they added.
MacDailyNews Take: Apple is currently down fractionally, trading at $111.49, -$0.32 (-0.29%) in pre-market trading.