US stocks closed higher on Tuesday as the Nasdaq continued to rally dragging up the Dow. Concerns about the spread of COVID weighed on hospitality stocks. Most sectors in the S&P 500 index were higher, led by energy, consumer staples bucked the trend. The Fed chair Jerome Powell testified in front of the House Financial panel on Tuesday and warned that there needs to be a solution for companies that cannot take on more debt. Consumer confidence rose more than expected while the Chicago PMI report came in lower than expected. The VIX volatility index moved lower on Tuesday falling to a 2-week low below 31%.
Consumer Confidence Rebounds
Consumer confidence increased more than expected in June as restriction loosened for stay-at-home orders, raising hope for an economic recovery. The Conference Board’s consumer confidence index rose to 98.1 for the month. Expectations had been for consumer confidence to rise to 91 from a May reading of 85.9. The board’s present situation index rose to 86.2 from 68.4 while the short-term outlook among consumers also improved.
Chicago PMI Survey Comes in Weaker than Expected
The US Chicago purchasing managers index rebounded slightly to 36.6 in June, after falling to a 38-year low in May. Expectations had been for a stronger rebound up to 44.5 from 32.3 in May. This comes a day before the US ISM purchasing managers report which is scheduled to be released on Wednesday.
Goldman Says Facemask Would Increase Growth
Goldman Sachs the investment banking powerhouse said that a federal face mask mandate would not only cut the daily growth rate of new confirmed cases of Covid-19 but could also save the U.S. economy from taking a 5% GDP hit instead of additional lockdowns.
Fed Chair Powell Warns of Continued Economic Weakness
Fed Chair Powell warned of extraordinary uncertainty ahead as the coronavirus continues to spread throughout the United States. In a statement and question and answer session in front of the House financial panel Powell said that a full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.
This article was originally posted on FX Empire