By Steve Goldstein
European stocks rallied on Tuesday, taking heart from signs of a slowing spread of the coronavirus pandemic and the possibility that a new round of U.S. stimulus will get enacted.
Up 0.3% on Monday, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.63% rose 2.1%.
Travel and leisure plays led the rise, with gainers including International Airlines Group /zigman2/quotes/208070069/delayed UK:IAG -0.04% , cruise operator Carnival /zigman2/quotes/210414141/delayed UK:CCL -0.46% and InterContinental Hotels /zigman2/quotes/202865596/delayed UK:IHG +0.44% , which reported a loss and said it wouldn’t pay a dividend.
Automobile makers BMW /zigman2/quotes/201187750/delayed XE:BMW3 +2.80% /zigman2/quotes/202432319/delayed XE:BMW +2.66% , Volkswagen /zigman2/quotes/203434344/delayed XE:VOW3 +2.75% and Daimler /zigman2/quotes/201850364/delayed XE:DAI +2.52% each registered strong gains, fueling gains for the German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.66% .
The coronavirus picture in the U.S. seems to be improving. According to the New York Times tracker, new cases have fallen 18% over the last 14 days and new deaths have dropped 6%.
The gains in markets come amid signs the executive order President Donald Trump signed to extend jobless benefits won’t actually reach the hands of unemployed Americans.
The extra $400 a week Trump’s order provides is contingent on states paying $100, and New York Gov. Andrew Cuomo said no one in his state would receive the extra $400. But officials in the White House and Congress say they are open to resuming talks on a stimulus package.
“The clouds of uncertainly are starting to part, and a ray of optimism is breaking through that additions to the U.S. stimulus package are looking more promising as both sides are set to rejoin the negotiating table,” said Stephen Innes, chief global markets strategist at AxiCorp.
Discussion by Trump of a possible capital-gains-tax cut — he could order the Treasury to index capital-gains tax thresholds to inflation — also was news seized by analysts.
The latest labor market data showed the U.K. unemployment rate stayed flat at 3.9% in the three months to June , reflecting people not seeking jobs as well as 7.5 million who are either furloughed or temporarily away from their job.
Of companies in the spotlight, HelloFresh /zigman2/quotes/203376622/delayed XE:HFG -2.62% gained 3% as the German prepared food kit maker raised its financial guidance for the third time this year. The stock has soared 163% this year.