(29 September 2020)DAILY MARKET BRIEF 1:Wall Street Extends Gains on Stimulus Hopes
US equities extended the bullish stance on Monday, though this is still not enough to cover September losses. Besides tech, the best performers were the sectors tied to the economy, such as financials, energy, and industrials. Investors are more optimistic about the economic recovery after House Speaker Nancy Pelosi hinted that the $2.4 trillion stimulus deal was still in discussion. Also, investors are now betting on those sectors because they have previously underperformed as a result of the pandemic, and many stocks can be bought at a discount.
The S&P 500 rose 1.61%, the Dow added 1.51%, and Nasdaq surged 1.87%.
Financials and industrials added over 2%, with the former being driven by banking shares amid hopes of new stimulus. The Democrats’ stimulus package will be put to the vote next week. It includes unemployment benefits, direct payments to consumers and small business loans.
JPMorgan, Bank of America, and Citigroup rose over 3%.
Airlines surged on Monday, boosting industrials. Delta Air Lines and United Airlines rose more than 6%, with the latter announcing that its pilots agreed to cut their working hours to avoid furloughs planned from October. The proposed stimulus bill also includes aid for airlines. Boeing rose 6.1% after Federal Aviation Administration Chief Steve Dickson announced that his agency would carry out a 737 MAX evaluation flight later this week.
The tech sector was also among the best performers, with Apple, Microsoft, Amazon, Alphabet, and Facebook boosting Nasdaq.
Uber rose over 4% on the news that it was granted a new license to resume operations in London after winning its appeal against Transport for London.
Asian shares are mostly up in early trading on Tuesday, following the rally in US stocks. Investors on all continents will watch the debate between President Donald Trump and Democrat candidate Joe Biden later today.
At the time of writing, China’s Shanghai Composite is up 0.36%, and the Shenzhen Component has surged 1.04%. Investors are now waiting for a series of Chinese economic data, which includes the manufacturing and non-manufacturing PMIs, and also the Caixin manufacturing PMI, due to be published tomorrow, to grasp China’s recovery pace. In the weekend, data showed that Chinese industrial profits increased for the fourth straight month in August.
Japan’s Nikkei 225 is up 0.15% after initial losses. South Korea’s KOSPI has added 0.94%
In Australia, the ASX 200 has declined 0.08%, while Hong Kong’s Hang Seng Index fell 0.60%.
European stocks will open mostly higher on Tuesday, except for German DAX and Spanish IBEX, whose futures are now flashing red.
