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Vaccine hopes lift stocks even as Trump-China tensions escalate



This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.

Good morning, Bull Sheeters. Global stocks are mixed. China-Trump trade tensions are depressing Asian markets, but vaccine hopes are lifting Europe and U.S. futures.

Let’s see where investors are putting their money.

Markets update


  • The major Asia indexes are mixed in afternoon trade. The lone bright spot is Japan’s Nikkei, up 1.6%.
  • The Trump Administration ended Hong Kong’s special trade status with the U.S., a move that could seriously crimp the region’s multinationals and banks. The Hang Seng was down as much as 0.3%.
  • Disappointing and wrong.” That’s China’s response to Britain’s decision to finally cut the cord with Huawei as a major 5G equipment provider.


  • The European bourses pulled higher out of the gates with the benchmark Stoxx Europe 600 up 0.8%.
  • Burberry shares fell as much as 6.7% after the company reported sales bombed 45% lower last quarter and that it will have to resort to dramatic belt-tightening, including job cuts and shop closings.
  • A bit of upbeat earnings news now… Dutch chipmaker supplier ASML expects “a growth year” after Q2 revenues surged 35%. Shares dropped 2.9% at the open. Tough crowd.


  • U.S. futures point to a positive open with the major averages expected to pad yesterday’s gains, which were helped by Caterpillar, Boeing and Big Oil stocks.
  • Banks had a mixed day on Tuesday. Wells Fargo shares plunged 4.5% while JPMorgan Chase ticked up 0.5%. Wells Fargo, Citigroup and JP Morgan set aside $28 billion to cover bad loans, a metric to follow to see how the American consumer and Corporate America are weathering the pandemic.
  • All eyes are on Moderna today. The company’s Covid-19 vaccine trial produced positive results, lifting hopes for some kind of virus treatment—and triggering an impressive risk-on rally. Shares were up 16% in pre-market trading.


  • Gold is down.
  • The dollar is down.
  • Crude is up, but there are concerns OPEC could trigger another price drop if producers move ahead with a supply hike.


The vanishing V

Bank of America released its much followed fund manager survey yesterday. There’s so much in it that I’ll cover the findings tomorrow as well.

The big take-away: A V-shaped recovery is a longshot. America’s summer surge in coronavirus cases has just about wiped the best-case scenario off the table.

According to the survey, roughly one in seven respondents (only 14%) now say they expect the most benign sequence of events: the quick, sharp economic recovery. “U” continues to be the most likely prospect, but the dreaded “W” is gaining ground. (This is beginning to sound like the most frightening episode of Sesame Street ever scripted.)

All in all, investor sentiment remains extremely cautious. Fund managers are watching as investors crowd into the perceived safety of tech, gold, cash and bonds and ditch (or even, short) energy, banks and industrials. Earnings season is unlikely to change that.

And, the coming election is putting investors in a wait-and-see mood. No surprise there. This happens every four years.

The most popular Q3 trading strategy now is to do nothing.

There’s another number (two, actually) to watch. The S&P 500 at 3,250. Once the benchmark index ticks above that level, it’s time to sell, survey respondents say. The other number: 2,950. If the S&P hits that floor, then buy, they say.

At this rate, we could hit S&P 3,250 this week, if not today. Maybe somebody should alert the Robinhood crowd.


Have a nice day, everyone. I’ll see you here tomorrow. 

Bernhard Warner

A note from my Fortune colleagues on a timely new initiative:

Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.

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Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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