Vaccine and US jobs hopes boost global stock markets despite fears of second Covid-19 wave

Additional reporting: Reuters

Global stocks climbed as traders assessed prospects for an economic rebound in the US after better-than-estimated jobs data amid concern over a second wave of coronavirus cases.

The S&P 500 extended its weekly rally as a US government report showed payrolls rose by 4.8 million in June after an upwardly revised 2.7 million gain in the prior month.

The Nasdaq Composite headed toward a record.

Equities briefly pared gains as Florida reported another increase in virus infections, with deaths rising the most in a month.

The rebound in the US labour market accelerated as the economy reopened more broadly -- before a pickup in coronavirus infections that could put additional gains at risk.

President Donald Trump still said the report shows the economy is “roaring back”.

Massive monetary and fiscal policy stimulus helped lower borrowing costs and keep the financial system liquid in a time of stress -- while propelling the stock market higher.

“There’s still a general positive sentiment about how quickly we’re seeing the recovery,” said Chris Gaffney, president of world markets at TIAA Bank.

“But we do think you’re going to see the recovery level off, especially if we continue to see higher case numbers on the virus,” he said.

London shares also rose on as signs of progress in developing a Covid-19 vaccine bolstered hopes of a post-pandemic economic recovery.

Travel stocks added 2.5% as a report said the British government will end quarantine rules for those arriving from 75 countries so that people can go on holiday.

The Ftse-100 has rebounded sharply since a coronavirus-driven crash in March but is still down about 17% on the year with investors closely tracking reports of a resurgence in Covid-19 cases, which could lead to another shutdown.

“The risk now appears to be reversing previous action to ease lockdowns and go back to square zero. Any news of a vaccine being developed will only have a short-lived impact on markets until it becomes available to the entire population,” said Hussein Sayed, market strategist at FXTM.

Investors also assessed remarks from White House Economic Adviser Larry Kudlow, who told Fox Business Network that “we are very unhappy with China” and “there are going to be export restrictions”.

US stocks are poised to rise this quarter if history is any guide, according to Keith Lerner, chief market strategist at SunTrust Private Wealth Management.

Mr Lerner cited the S&P 500’s track record after its biggest quarterly gains since 1950. Bloomberg and Reuters