Wall Street Close: US stocks shrug off WHO's COVID-19 warnings

• Dow Jones Industrial Average rallied by around 580 points, or 2.3%, to end at 25,596.
• S&P 500 index added 1.5% to 3,053, led by a 3.2% surge in industrials and a 2.1% rally in communication services.
• The Nasdaq Composite Index added 1.2% to close at around 9,874.

US stocks on Monday surged at the start of a holiday-shortened week, despite the second wave of COVID-19 taking shape throughout various states of the US. US data was better than anticipated which gave rise to renewed optimism about a US economic recovery.

Pending Home Sales in May were spiking 44.3%.

Subsequently, along with a hefty gain in Boeing Co. BA which helped to raise all boats, the Dow Jones Industrial Average rallied by around 580 points, or 2.3%, to end at 25,596.

Elsewhere, the S&P 500 index added 1.5% to 3,053, led by a 3.2% surge in industrials and a 2.1% rally in communication services. The Nasdaq Composite Index added 1.2% to close at around 9,874.

Strong rebound, but not enough to restore erstwhile levels of activity

Analysts at ANZ Bank explained that May pending home sales rose 44.3% MoM, the highest monthly rise on record and offsetting much of the decline seen in March and April. In level terms, the index (99.6) is still down from its pre-crisis peak in February (111.4).

But the data did show the enthusiastic way that households are embracing the lifting of lockdown restrictions. The resurgence is being helped by record low mortgage rates despite the record high levels of unemployment.

 The Dallas Fed manufacturing index surged 43.1 points in June to -6.1, up from a low of -74.0 in April. Production rebounded sharply (13.6 vs -28.0) as did new orders (2.9 vs -30.6). Employment rose to -1.5 vs -11.5.

COVID-19 deaths passed the 500k mark

The WHO warned that “the worst is yet to come”, following the updates to the latest death toll toppling the 500k mark.

The WHO has stated, that unfortunately, while “many countries have made some progress, globally the pandemic is actually speeding up”.

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