Asia
Markets in the region reacted to a modest nudge higher in equities at the start of the new trading week. At the moment, global investors are prioritising economic growth rather than fretting about the consequences of a trade war and a failure in talks between the US and North Korea.
A stable dollar and bond yields gave equity investors some breathing space after recent weeks of volatility.
Hong Kong’s Hang Seng moved back above 31,000 points, close to levels seen in May when the index hit 31,500.
Japan’s Nikkei and Topix indices are also close to May’s recent highs.
Europe
Stocks in the eurozone joined in the modest gains, with Germany’s Dax the biggest riser. Still, the day’s price movement was less than 1%.
The UK’s FTSE 100 struggled, however, after an early move higher. The pound reacted positively to better-than-expected services data for May. With the country’s service sector expanding healthily in May – and it is a much bigger determinant of economic growth than construction and manufacturing sectors – investors are starting to price in stronger showing for second quarter economic growth than in the first.
Of course, that argument then leads to the Bank of England’s door: the Monetary Policy Committee is due to meet on June 21 and the odds are shortening for an interest rate rise. The August inflation report was seen as the next likely meeting for a rate hike, but June is now in focus with no meeting scheduled for July.
Royal Bank of Scotland (RBS) was one of the biggest fallers as the UK Government sold off a portion of its majority stake in the bailed-out bank.
North America
US markets are expected to maintain their recent strong run on Tuesday, not least the Nasdaq, which closed at a record last night.
Tesla (TSLA) holds its annual shareholder meeting in California today, in which some investors will push for Elon Musk’s role as Chairman and Chief Executive of the company he founded to be divided.
Morningstar analyst Dave Whiston thinks that Musk is unlikely to be ousted as chairman, with shareholders more than happy with the company's performance in recent years.
The company’s founder achieved notoriety this year for a conference call in which he dismissed as “boring” analyst requests for more financial information.
The ISM non-manufacturing May survey is due today, and investors are expecting the US services sector to have returned to growth.
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