Stocks around the globe rose on Tuesday to six-month highs as positive economic data in China and Germany boosted investor sentiment, though concerns about the impact of US policy on the healthcare sector paused Wall Street’s rally.
Wall Street’s S&P 500 gave up nearly all of its earlier gains as healthcare shares fell after UnitedHealth Group Inc discussed concerns about US Senator Bernie Sanders’ ‘Medicare for All’ plan, as well as the White House’s proposal to end discounts from drugmakers.
“In healthcare, there is concern over various single-payer plans, which could damage the health insurance industry,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “That thesis slowly worked its way into the sector today, and aggressive selling begets more selling.”
Even though Wall Street stocks treaded water, an advance in Chinese and European shares helped push the MSCI world equity index to a six-month high. Positive data, including a quicker pace of growth in Chinese home prices and improving sentiment among German investors, bolstered global equities.
The latest leg higher in this year’s global rally comes as a degree of calm has descended across financial markets. European stock volatility reached its lowest level since January 2018, while on Wall Street, the CBOE Volatility Index hit its lowest level in more than six months.
The US-China trade dispute, signs of slowing global corporate earnings and fears about an economic downturn have weighed on riskier assets in the past year. But investors have been quick to seize on positive news to keep the bull market running.
Among the information investors are anticipating is Chinese quarterly economic growth data, due on Wednesday. After a worrying start to the year, Chinese numbers have been more positive as authorities ramped up stimulus measures, soothing investor fears about a slowdown in the