(25 September 2020)DAILY MARKET BRIEF 1:Wall Street Bounces Back
US equities ended higher on Thursday after a rough session. Investors reacted to mixed economic data, with optimism surrounding the surge in new home sales offsetting the disappointment caused by the surprising increase in jobless claims.
Also, bulls leveraged the news that Democrats in the House of Representatives are working on a $2.2 trillion stimulus package. The bill is expected to be voted next week.
Still, the stock indices need a major boost on Friday in order to end the week higher, which most likely won’t happen. On Thursday, the S&P 500 rose 0.30%, Dow Jones added 0.20%, and Nasdaq increased by 0.37%.
Tech giants, including Amazon, Apple, Facebook, and Nvidia, have all increased.
Initially, stock indices started the session lower after the Labor Department said that jobless claims rose 870,000 in the week ending September 19, up from 866,000 in the previous week, while analysts expected a decline to 840,000. The unexpected increase suggests that the economic recovery is losing momentum.
Later in the day, stocks rebounded after the Commerce Department reported that new home sales rose 4.8% to their highest in 14 years last month.
All in all, the three benchmark indices are still hovering near the correction territory, as the S&P 500 closed 9.6% below the recent all-time high. Nasdaq fell below the 10% mark that defines a correction. After the best August in three decades, Wall Street has had one of the worst months of the year as the US Congress couldn’t approve another stimulus package, while the fears of a second wave of the pandemic and political uncertainty ahead of the US presidential election are adding more pressure.
Asian shares are mixed on Friday, but bulls are dominant as they try to reverse losses from yesterday.
At the time of writing, China’s Shanghai Composite is down 0.43% after initial gains, while the Shenzhen Component is up 0.11%.
Hong Kong’s Hang Seng Index is down 0.40% after opening higher. Japan’s Nikkei 225 has increased by 0.52%, and South Korea’s KOSPI added 0.53% so far.
In Australia, the ASX 200 surged 1.30%. The state of Victoria is about to ease lockdown measures as the number of coronavirus cases continues to decline. On Friday, the state reported only 14 new cases.
Meanwhile, European stocks are set to open mostly higher even as the number of COVID cases continues to increase in countries like France and the UK, both of which reported record numbers.
