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The ASX is expected to rise this morning after a choppy day of trading on Wall Street.
ASX futures rose 0.4% to 7,102 points as of 7:00 a.m. this morning and the dollar also rose to 69.7 cents US.
But global markets are signaling that the recovery is still a long way off. The general trends for 2022 are not in the right direction, with stocks in the United States falling all year.
The Nasdaq has fallen nearly 25% in 2022 and is in a bear market, while the S&P 500 is on a six-week losing streak.
Weak Chinese data, end of lockdown in sight
Chinese economic data came out and it spooked some markets. European luxury goods fell on the news.
The country’s unemployment rate was 6.1% last month, which is the highest since the early days of the pandemic in February 2020.
Despite this, the end of confinement is in sight and, with it, a recovery. Indeed, fuel prices rose after the announcement of the reopening of Shanghai on June 1.
The price of Brent crude rose 2.4% to US$114.24 per barrel, while the price of US Nymex crude rose 3.4% to US$114.20 per barrel.
Measuring fear and greed
According to the CNN Business Fear and Greed Index, which measures market sentiment, the market was in a state of “extreme fear” last week, down from “fear” last year.
The scale measures market sentiment, starting from the theory that there is market volatility at either end of the fear-greed continuum and that greed indicates inflated prices, while fear signals decline.
Given that the Fed is not yet done with the scythe on monetary policy and that uncertainty is the word of the moment, markets may continue to fall.
Golden arches leave Russia
When McDonald’s arrived in the former Soviet Union in the 1990s, it was an iconic moment. It was American fast food’s first foray into this rapidly changing region at a time when Francis Fukuyama hinted that the fall of the Iron Curtain promised “the end of history.”
Three decades later, the brand pulled out of Russia as the war in Ukraine reached three months.
This is the first time the company has exited a major market. It will sell its 850 restaurants in the country to a suitable buyer and plans to remove its brand from outlets, while keeping its brands in the country to stop copycats.
Last month, the company said it was losing $55 million a month and $100 million in inventory due to restaurant closures. It also closed 108 restaurants in Ukraine while continuing to pay employees there.
The move follows Shell’s announcement to suspend operations in Russia, joining hundreds of other companies that have taken similar steps, including Nestlé, Ford, Coca-Cola and Heineken.
Focus on biotechnology investments
Back home, the PLA is set to unveil a plan to accelerate medical manufacturing and secure domestic supply chains for medical technology and vaccine production. The campaign promise includes working with biotech sectors to boost sourcing strategies, invest in local manufacturing capacity and create jobs.
The proposed $1.5 billion Medical Manufacturing Fund is part of the party’s $15 billion National Reconstruction Fund campaign platform.
The party cited a report that the medical technology sector could add $18 billion to the Australian economy and nearly 30,000 new jobs within a decade.
Less than a week remains before polls and parties spar over costs and policies, better than the previous campaign focused on personalities and blunders.
In other news
Base metal prices were up the most, 0.8% to 2.0%, led by zinc, although nickel fell 2.7%.
Gold futures added US$5.80 or 0.3% to US$1,814.00 an ounce, spot gold was trading near US$1,824 an ounce at the close in the United States, while the iron ore futures price rose 1.2% to US$132.50 per tonne.
