Good morning, Bull Sheeters. We made it! Welcome to 2H.

The first half ended yesterday on a high note—in sheer defiance of all the unnerving geopolitical and pandemic news. There are escalating tensions between Hong Kong and Beijing, and between Washington and Beijing. And, Dr. Anthony Fauci told Congress yesterday that America is “going in the wrong direction.” Clearly, he wasn’t talking about the markets.

As long as we have tech stocks and gold, investors will be pretty content.

Let’s check in on today’s action.

Markets update

Asia

• The major Asia indexes are mixed in afternoon trade. Shanghai is up; the Nikkei is slipping and Hong Kong is closed for the holiday.
• The Chinese central government’s new national security law went into effect yesterday evening local time, and, not soon afterwards, Hong Kong police had made its first arrest: a man holding a flag declaring “Hong Kong Independence.” The matter is spilling across borders as it’s looking likely that Beijing will now slap “reciprocal” restrictions on U.S. media outlets operating in the country.
• Asia’s economy is expected to contract in 2020, “for the first time in living memory,” the IMF gloomily predicts.

Europe

• The European bourses were mixed in light trade, with Germany’s Dax up 0.6%. Paris and London were down.
• There’s more trouble in the skies today as Airbus announced its biggest restructuring in its history. 15,000 jobs must go to stabilize an epic cash burn. Norwegian Air, one of Boeing‘s best customers, canceled a huge order for 737 Max planes.
• Polls close today in Russia as Vladimir Putin seeks a constitutional overhaul to stay in power for another 16 years. He’s well on his way to getting his wish.

U.S.

• The major averages closed out the quarter (and the half) on a high note yesterday. It was the best quarter for U.S. stocks in 22 years.
• Dr. Anthony Fauci wasn’t sounding bullish yesterday. He told a Senate committee that 100,000 new COVID cases per day is looking likely. The U.S., he said, “is going in the wrong direction.” The markets rallied afterwards.
• Here’s a persuasive argument for extending the supplemental $600 weekly unemployment benefits: fail to do so, and the U.S. economy will head straight back into recession.

Elsewhere

• Gold is up. Again.
• The dollar is flat.
• Crude is up.

Six months that shook the world

The first half of 2020 was brutal. Great Depression-like falls in employment. An unprecedented wave of bankruptcies. A global recession. More than a half-million COVID-19 deaths. But you know what? A lot of canny investors have made a lot of money in 2020.

That’s particularly true of the past quarter. As I mentioned above, Q2 2020 was the best quarter for U.S. stocks since Q4 1998.

The S&P 500 closed the quarter up 20%. The Dow Jones Industrial Average climbed an impressive 18%, and the Nasdaq scored a whopping 31% quarterly gain.

But that’s only part of the story. The full first-half reveals where the big winners and losers of this pandemic can be found. I ran the numbers this morning… and found an asset that actually outperformed the Nasdaq.

If your portfolio is long on tech, you’re pretty happy this morning. The Nasdaq is one of the few major averages to be showing YTD gains (12.1%). For the year, the S&P is down roughly 4%. (More on that in a moment). And, despite a recent rally, both Japan’s Nikkei and Germany’s Dax are showing single-digit losses for 2020.

The big winners are tech (look at Apple, up nearly 25% YTD) and gold (17.4%).

Now, back to the S&P. The benchmark index is full of contrasts in 2020. As you know, the tech components are flying high. Meanwhile, energy (-37%) and finance (-24%) have been a huge drag.

Looking forward, the second half could be an even more volatile one than the first. The first major test of investor sentiment comes tomorrow with the June jobs report. And, further out, we have the elections.

It wouldn’t be a surprise if the most cautious investors were to sit it out until the data improves and the political picture clears up.

***

Have a nice day, everyone. I’ll see you here tomorrow… And, a reminder: the U.S. markets are closed on Friday for the Independence Day holiday, so there will be no Bull Sheet newsletter on Friday.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

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. https://bit.ly/WorkingWhileBlack

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

The Apple dilemma. This data point by Fortune's Shawn Tully blows my mind: "The iPhone maker climbed 62% to $362, beating the previous record and adding $600 billion to its valuation, approximately equal to the combined market caps of Netflix, Tesla, and Adobe." Tully digs into that valuation figure, and answers the big question: is it still a good share to buy, or simply too expensive? 

Investors, revolt! The scandal behind Wirecard, the former darling of the Dax, is one for the ages. Billions have gone missing (if they ever existed in the first place). The former CEO was arrested. The company filed for insolvency. And, now shareholders are lining up to sue. I spoke to one such shareholder who shared the story of how he lost his shirt, and why he's not walking away without a fight.

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Market candy

Quote of the day

“Because people will make assumptions or because there’s a lack of knowledge, the one thing we can all expect is more volatility.”

That's JJ Kinahan, chief market strategist at TD Ameritrade, telling the Wall Street Journal why it's so tough this year to forecast how the markets will perform in the second half of 2020. Markets forecasting is always a difficult task, but coronavirus has thrown those calculations into disarray. Still, plenty of markets pros are weighing in with an opinion.