Pandemic, Protests and US-China Tension Did Not Break Market Rally

Pandemic, Protests and US-China Tension Did Not Break Market Rally

Protests in the U.S. Over George Floyd’s Death

U.S. stocks are trading higher despite the on-going riots and looting in the United States. Several cities including Minneapolis, Chicago, San Diego, California, Washington have been in the news because of local reaction to the video that showed the killing of George Floyd. 

Meanwhile, Trump is pushing for the National Guard to restore order, but it seems like things are getting out of control.

Protesting and COVID-19

The continued wave of demonstrations in many major cities in the United States continues to escalate in response to the police killing of George Floyd, and the ongoing protests bring into question if coronavirus cases will rise.

Minnesota Governor Walz said he expects a sharp increase in cases of Covid-19 in his state

"I am deeply concerned about a super-spreader type of incident," Walz said. "We're going to see a spike in Covid-19. It's inevitable." 

Trump’s Response Was A Slap on The Wrist

Asian markets rise on ‘sigh of relief’ over Trump’s response to China as it wasn’t as bad as feared. 

Donald Trump announced that he would revoke special trade privileges for Hong Kong and sanction officials from the territory and mainland China after Beijing moved to impose new security laws on Hong Kong. 

“People’s Daily” published a commentator’s article, saying that Hong Kong affairs are China’s internal affairs, and the hegemonic actions of external forces that grossly interfere in China’s internal affairs will not succeed. 

The key takeaway is that Trump’s news conference on Hong Kong’s security law fell short of announcing new sanctions over China has left markets optimistic that the “phase one” trade deal between the two superpowers may not be abandoned.  Had he escalated the tensions between the U.S. and China it would have put the US-China trade deal in jeopardy. This would have also threatened the recovery in both countries—the single biggest threat for the stock markets.

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