Financial markets do not seem to be embarrassed by the uncertainties in the United States linked to the coronavirus, the presidential election in November, the economic crisis, tensions with China or the fall in the dollar. The New York Stock Exchange took the S&P 500 to a level never before reached on Tuesday, completely wiping out the losses suffered by the index at the start of the spread of the pandemic.
Decrease of more than 30% between February 19 and March 23
The broad index, which represents the 500 largest companies listed on Wall Street, appreciated 0.23% to end at 3,389.78 points, above the previous record dating from February 19. The S&P 500 had yet collapsed by more than 30% between that date and March 23.
The severe restrictive measures imposed in the face of the advance of Covid-19 in the United States raised fears of a plunge in economic activity and corporate profits and a surge in unemployment. But since then the government has stepped up to the plate with its vast plan to support households, businesses and local communities. At the same time, the American central bank (Fed) has injected trillions of dollars into the markets to ensure their proper functioning and to guarantee companies a reliable source of financing.
Technology stocks on the rise
As a result, the Nasdaq is also on an uptrend. It returned in June to its level before the health crisis. With a strong technological coloring, it took advantage, in full confinement, of the increased activity of companies specializing in online commerce, IT or even entertainment on the Internet. On Tuesday, the index appreciated further 0.73% to 11,210.84 points on the back of the rise in shares of groups like Amazon (+ 4.1%), Alphabet, the parent company of Google (+2 , 7%), or Netflix (+ 2.0%).
The Dow Jones for its part, where so-called cyclical stocks are more present, which depend more on economic activity, has not yet regained its pre-pandemic record. The flagship Wall Street index fell 0.24% on Tuesday to 27,778.07 points. The indicator of the day was however rather positive, housing starts in the United States having jumped 23% in July compared to June.
Walmart and Home Depot reassure
Another optimistic sign on the financial health of American households: thanks to consumers with purchasing power supported by government aid and who, stuck at home, bought more food and engaged in household chores, the giant supermarkets Walmart and home improvement and home improvement chain The Home Depot reported better-than-expected quarterly results.
Highlight: @CharlesSchwab Chief Global Investment Strategist @JeffreyKleintop on the risks to investor confidence and the US economic recovery: pic.twitter.com/XU8Rv1PbnO
- Yahoo Finance (@YahooFinance) August 18, 2020However, analysts at Charles Schab also note, “the headlines in the United States remain dominated by the high tensions between the United States and China, the inability of parliamentarians to agree on a new support plan. to the economy and fears related to Covid-19 ”.
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