The US stock market rally is about to continue on Monday, judging by the bullishness seen in the futures market. Dow and S&P 500 futures are up about 0.50% while NASDAQ futures have gained almost 0.80% so far. Investors are all in amid the Fed’s dovishness.
For the American stock market, August has been the best month in about 30 years, with the S&P 500 raising by over 7%, Dow adding over 8%, and NASDAQ gaining almost 9%.
When the US stock indices nosedived in mid-March, some economists argued that the market hadn’t bottomed out yet. Nevertheless, the Fed’s unlimited quantitative easing has done the trick so far, and equities have mostly rallied since then. It remains to be seen the long-term effect on the purchasing power of fiat currencies. The Fed continues to push share prices by pledging to maintain interest rates close to zero for a long time.
Starting from Monday, the Dow Jones index is looking slightly different, as it tracks three new companies, including Amgen, Honeywell, and Salesforce. These are replacing Pfizer, Exxon, and Raytheon Technologies. Also, Apple’s 4-for-1 stock split is taking effect today, so the company will have a much smaller weight in Dow’s 30-stock average.
In Asia, equities are also bullish on Monday, hitting a 29-month high. One of the main drivers was the unexpected recovery in China’s service sector. The country’s non-manufacturing PMI increased to 55.2 in August from 54.2 in July. Investors are relieved to see that the world’s second-biggest economy keeps recovering from the impact of the coronavirus pandemic. At the time of writing, Shanghai Composite is up 0.64%, and the Shenzhen Component has gained 0.62%.
Elsewhere, Hong Kong’s Hang Seng is up 0.94%. The index has retreated in the last few hours after an aggressive start.
