Yesterday’s trading session was extremely successful for the US stock market. The Nasdaq Composite index ranks first. It managed to reimburse all losses since the beginning of the year caused by coronavirus spreading.
The index overcame difficulties due to the steady growth of securities of large players in the high-tech sector. These are Alphabet, Amazon, Apple, Facebook, and Netflix. Shares of these companies have grown significantly in the current quarter.
What is the reason for such an unexpected growth? This is about the massive transition to telecommuting, which resulted in an increase in demand for cloud products and entertainment content.
Optimistic statistics on the state of the US labor market also became a growth driver for the stock market.
The U.S. Department of Labor has published data that made it known that the number of Americans applying for unemployment benefits for the first time has fallen to 3.169 million. Just a week ago, this figure was 3.846 million.
Of course, we cannot think yet about a full-fledged restoration of the labor market over the past seven weeks the total number of applications for unemployment benefits in the United States has reached 33 million.
Labor productivity has decreased too; for the first quarter the drop has totaled 2.5% (experts believed that the value of this indicator would be 5.5%).
The cost of labor has increased paradoxically: the quarterly growth is equal to 4.8%, while the consensus forecast was 4%.
Analysts agree that the exit of the national economy from the crisis will not be quick. However, no one is waiting for the second Great Depression. Donald Trump’s assurances help the market and feed on the optimism of its participants. It is about focusing maximum efforts on the restoration of the national economy and creation of the effective vaccine against coronavirus. However, the market is pulled down by another round of the trade war between the States and China.
The Chinese, meanwhile, have rolled up their sleeves and started to restore full-time work. Excellent data on the volume of Chinese exports in April was a surprise. For the month, exports have increased 3.5% (compared with the same period last year) and reached $ 200.28 billion. There is also “a fly in the ointment” – China imports have fallen by 14.2% to $ 154.94 billion.
Let’s get back to the US stock market. During yesterday’s trading session, shares of Peloton Interactive Inc. increased 16%. The company specializing in the production of sports equipment has increased revenue in the third financial quarter by 66%.
ViacomCBS Inc media holding has showed the growth of 12.7% due to the excellent quarterly reporting.
Also, encouraging reporting has helped the securities of the Hilton Worldwide Holdings Inc. hotel chain to grow by 1.6%.
Capitalization of Lyft Inc. has soared too. The growth of the American taxi service has amounted to 21.7%. In the first quarter, net losses reduced three times while the revenue was kept at the same level. All this caused the growth of the company’s capitalization.
How indexes behaved:
- Dow Jones Industrial Average has grown 0.89%, closing at 23875.89 points.
- Standard & Poor’s 500 has added 1.15%, fixing at 2881.19 points.
- Nasdaq Composite has shown an increase of 1.41% to 8979.66 points.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group