Optimistic sentiment spurred the recovery of global stock markets

Optimistic sentiment spurred the recovery of global stock markets

Global equities have risen recently on the back of investor optimism following the good news about the Covid-19-resistant vaccine, and the positive results on giants’ revenues.

The US government's supportive policy boosted the stock market's recovery.
The US government’s supportive policy boosted the stock market’s recovery.

Last week, both the Nasdaq Stock Exchange and the Standard & Poor’s 500 Stock Index (S&P 500) continued to set new peaks recently, only the Dow Jones Industrial Average has not regained its level. record high in mid-February.

Economists have warned of the mixed consequences of the US stock market in the coming months. In the most likely scenario, the S&P 500 composite index of the US stock market will reach 3,390 points by the end of 2020, about 2% higher than today. If the Covid-19 vaccine is successfully prepared soon, the S&P 500 score could rise to 3,700 points. However, this index will drop below 2,200 points if the second Covid-19 outburst results in “a very significant reversal of economic activity”.

In addition, analysts said that the results of the upcoming US presidential election will also affect the US stock market when investors try to predict tax policies, spending plans in Government future of this country after the above election results.

Once again, Covid-19 is making many businesses fall back and others are thriving. Whether the 2020 plan is complete or not is less important than how the business is planning in the future and assessing whether they have the power to do it. Therefore, in order to get results, investors must understand the business well in order to reduce the investment money.

A few days ago, Pfizer Company and BioNTech Pharmaceutical Company announced favorable phase I test results for a potential Covid-19 vaccine for the next clinical phase with fewer side effects than the first. . The success of the Covid-19 vaccine development will be a huge driver of Pfizer’s prospects.

For now, however, Johnson & Johnson appears to be the better choice based on strong diversified business models, better performing metrics, stronger cash flow, analyst optimism and upside potential. More prices in stocks. Earlier, Novavax Vaccine Company saw a stock price hike when it announced it would receive more money from the Federal Government to develop and produce a potential vaccine.

Investors’ optimism, on the other hand, was also fueled by news that the US and China reaffirmed their commitment to implementing the first phase trade deal during a semiannual trade deal review. times. This demonstrates a commitment to cooperation as tensions over issues related to data security in Hong Kong are heightened.

So far, as the US and China have increasingly confronted in many fields, the goal of resolving the trade war between the US and China has emerged a rare area in which the two can cooperate.

In addition, the supportive policy of the US Government has promoted the recovery of the stock market. Federal Reserve official (Fed) said, can adjust support policies in the form of a commitment to keep interest rates near 0% until inflation reaches 2.5% – exceeding the 2% target level set by the Fed itself. Investors are looking for Fed Chairman Jerome Powell’s action on a review of the central bank’s monetary policy framework, which focuses on a new inflation strategy.

This policy change is intended to correct the “gaps” in achieving the Fed’s goals of maximizing job creation and admits that a tough job market doesn’t necessarily drive prices. increase. Before the Covid-19 pandemic broke out, the US unemployment rate had hovered around a 50-year low of 3.5%.

Elsewhere, the EUR increased slightly while gold and silver showed signs of going down. Market watchdogs believe that all these signals reinforce risk sentiment and offset support for precious metals.

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