Risk appetite is stepping hesitantly into the second half of the year, with Asian stocks edging higher while US futures slipped into the red. Over the past three months, the S&P 500 posted its best quarterly performance since Q4 1998 with a near-20 percent advance while the Dow climbed 17.8 percent.

It’s highly unlikely that US equities can better its Q2 performance over the coming months, with the rally having stalled of late. Last month, the Dow Jones index has been sandwiched mostly between its 200-day and 100-day simple moving averages, with the 50-SMA offering support.

Stock markets have priced in most of the optimism surrounding the US economy’s reopening, and are in need of fresh catalysts to gain another leg up. To be fair to equity bulls, recent economic data appear to justify the stellar climb in stocks over recent months. June’s consumer confidence reading surpassed market expectations to register its biggest one-month gain since 2011. The ISM Manufacturing print should show that the sector is moving closer towards returning to expansionary territory. Thursday’s US non-farm payrolls print is expected to show an increase of over three million jobs last month following May’s positive shocker, while jobless claims and the unemployment rate are set to moderate further.

Yet, scepticism has begun creeping in and investors are now second guessing the amount of upside that remains in stocks over the near-term. The rise in Covid-19 cases in some US states warrants a cautious outlook as they threaten to throw the US economy off its course towards the post-pandemic era.

Perhaps the thing to jolt equities out of its sideways saunter could come at the hands of the upcoming US earnings season in two weeks for now, or as the US Presidential race heats up. Until then, developments surrounding the pandemic are expected to continue holding court among global investors.

Gold moving upwards, slowly but surely

Gold has taken its own sweet time in making its ascent, defying expectations that the safe haven asset would soar amid the global pandemic. To be sure, spot Gold capped a 17.38 percent gain in the first half of 2020, and is now inching closer to that psychologically-important $1800 level. With Gold futures (for August delivery) breaching the $1800 mark for the first time since 2011 before moderating, it appears to be just a matter of time before spot prices would emulate the feat.

Bullion should continue facing upward pressure due to the persistent concerns among global investors, along with near-zero US interest rates that are set to stick around for longer. Still, in carving out more gains, Gold has to contend with a resilient US Dollar, as well as bouts of risk-on sentiment that are just raring to break through, at the expense of safe haven assets.