3 things that could impact ASX 200 shares this June

The S&P/ASX 200 Index (ASX: XJO) had an amazing month in May, rising more than 9% for the month. So much for ‘sell in May and go away’.

But as we start a new month and a new season, I think it’s still a time to be very cautious as we climb ever further from the lows we saw ASX 200 shares hit in March.

So here are 3 things that I think we should all look out for this June on the share market.

1) The spread of the coronavirus

Of course, this is the primary concern for all investors, as well as all Australians. The share market has been rallying in recent weeks mostly due to the fact that economic restrictions are being lifted in this country as a result of our collective effort to keep the number of coronavirus cases at a minimum.

We have seen just this week that (according to reporting from the Sydney Morning Herald) South Korea has had to re-tighten restrictions after an uptick in coronavirus cases. If this were to occur in Australia (fingers crossed it doesn’t come to this), it would be bad news for ASX shares.

2) Government assistance

As Reserve Bank of Australia governor Philip Lowe pointed out last week, the damage that the coronavirus has done to our economy hasn’t been as nasty as we all first feared.

Despite this, Dr Lowe also made comments suggesting that government assistance such as the JobKeeper program might have to be expended in order to further insulate the economy. If the government chooses not to go down this path, I think it would be detrimental for the whole economy, and by extension the share market. As such, I think it’s well worth keeping an eye on this space in June.

3) The almighty USA

We don’t like to admit it here in Australia, but the direction of most share markets around the world (including the ASX) is really determined by what’s happening over in the good ol’ United States of America. As the old saying goes, if America sneezes, the rest of the world catches a cold.

Right now, the US government is pumping an extraordinary level of monetary stimulus into the US share markets, which is partly to thank for their (and our) bountiful 2 months of gains since March.

But if things were to go south Stateside, I fear the effects would spill over to our own ASX. Thus, the US is definitely worth watching as we journey into June.

More reading

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• 3 best stocks for ASX 200 investors in retirement to buy now
• Why these 3 ASX 200 blue chips could be set for growth this week
• Why the price of these ASX travel shares soared over 30% since mid-May

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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