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Boom in the US stock market

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Boom in the US stock market
March 25
09:00 2020

United States stock indices closed yesterday’s trading session with a breakthrough. Investors’ hopes that the US authorities will keep the pandemic under control caused this surge. In addition, their belief that the officials will soon agree on a program to help the weakening economy also affected the market behaviour.

The intraday growth of the S&P 500 index has become the highest over the past 12 years. Dow Jones has soared 11% at all. The last time the market saw such a sharp daily growth in 1933. Thus, at the close of trading, the Dow Jones index grew 2112.98 points, fixing at around 20704.91 points. Standard & Poor’s 500 has grown 209.93 points, closing the session at 2,447.33 points.

All day yesterday, US legislators were discussing a draft law to support businesses and citizens. It is estimated that the amount of infusion could be $ 2 trillion. The shares logically reacted to the forthcoming help from the authorities with a rapid increase.

On Monday, stock indices showed a serious drawdown. The fact is that statements by the Federal Reserve about the upcoming measures to save the economy seemed unconvincing for the investors. We recall that the day before yesterday, the Fed made an official statement about the absence of restrictions in the QE (quantitative easing) program. This means that the regulator is going to buy back as many assets as necessary in the current situation.

Yesterday, the statistics on the dynamics of business activity in the States were made public. It turned out that the recession was so serious that it could be compared with similar indicators during the global economic crisis of 2009.

The PMI index has fallen to an absolute historic low of 40.5 points. The calculations of this indicator began in 2009, but the index has never shown such low values to the market.

There is some good news. Some companies are experiencing real renaissance. For example, the stock quotes of the largest payment system in the world MasterCard have increased 16.6%. The company expects a significant increase in quarterly revenue due to an increase in the number of online payments worldwide.

Boeing shares have serious grown too – by 20.9%, Chevron securities have increased 22.7%; the shares of United Technologies have soared by 15.8%. The shares of Citigroup, one of the largest US banks, have jumped by 14.9%.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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