There was an increase in the main indicators in the US stocks on Wednesday, and in general, the trading session was very volatile. The Nasdaq Composite Index led the growth which once again renewed its maximum value.
Statistical reports of companies for the work carried out in the second quarter of this year and for the first half of the year as a whole were of great importance for market participants on Tuesday. In addition, investors have been keeping their eyes on the ongoing debate on stimulus measures for US citizens.
On Tuesday, Democrat leader Charles Schumer issued a statement that he endorsed the government's actions and looked forward to further making the right decisions regarding support measures. Thus, the negotiations nevertheless got off the ground and turned out to be very productive, which makes it possible to think that a consensus will be reached very soon.
It is already clear that all parties to the negotiation process have agreed on the total amount of $ 1.2 thousand incentive payments per employee. Nevertheless, the question of supplements to unemployment benefits remains open: no decisions have yet been made on it. However, it will also be necessary to decide on this matter before the Senate goes on vacation next Friday, otherwise, the decision will be postponed to an even later date. Experts stressed that the government should gather all its forces and take at least a package of short-term stimulus measures by Friday.
One way or another, the main part of the problems lies ahead for the state. Next year, the timing of the fiscal stimulus program will come to an end, which means that the country may find itself in a deeper hole than it is now. Nevertheless, the Fed claims that they are making every effort to avoid a critical situation and prevent an even greater recession in the state's economy. The presidential elections are ahead, which put pressure on the authorities and make them work more productively and make decisions quickly since none of the presidential candidates wants to appear in an unattractive light before the electorate.
No matter how hard the US government has tried, the current quarter is likely to face a slower recovery in economic growth. The unemployment rate will increase by the end of this year, and the rate of this growth may become much faster than previously assumed. Earlier it was said that the unemployment rate could be within 8%, but now these forecasts are increasing: we are talking about 9% or even 10%.
Meanwhile, Tuesday's data from the country's Department of Commerce, which reflected the rise in the sector of orders of industrial enterprises in America for the first month of summer sparked positivity amongst market participants. A 6.2% growth was recorded which was higher than preliminary forecasts of 4.6%. At the same time, it is important to note that the positive dynamics of the indicator has been recorded for the second month in a row, which indicates a rather rapid recovery of this industry against the background of the coronavirus pandemic.
Another major problem that has a significant impact on the stock markets is the unsettling tension between Washington and Beijing. The Chinese authorities reacted with undisguised negativity to the White House's threats to ban the TikTok application in the country if it is not purchased by a company from America. Beijing called the actions of the American authorities outright intimidation, which will be followed by a corresponding reaction from the state. Thus, the escalation of the conflict continues, with no end in sight.
The Dow Jones Industrial Average closed Tuesday's trading with a rise of 0.62% or 164.07 points, which allowed it to move to the level of 26,828.47 points.
The Standard & Poor's 500 Index gained 0.36% or 11.9 points. Its current level was within 3,306.51 points.
The Nasdaq Composite Index rose 0.35% or 38.37 points, which forced it to move to the level of 10,941.17 points. Thus, for the thirtieth time this year alone, the indicator breaks a new record for its closing level. At the same time, growth has been recorded for the fifth day in a row.
The Asia-Pacific stocks, on the other hand, again underwent fluctuations on Wednesday. Market participants here are focused on the adoption of the stimulus package in the US, as well as the opportunity to plan and conduct negotiations between Washington and Beijing on a trade agreement that was previously postponed indefinitely.
So far, the date of negotiations is set for August 15, however, the tension between the countries is growing, and the meeting may be postponed. Nevertheless, market participants hope for the best.
However, there are serious concerns that the situation may only get worse in the near future. Thus, the US Secretary of Health is going to visit Taiwan as part of an official delegation. According to analysts, this move can only strengthen the opposition between the countries.
China's Shanghai Composite index remained at almost the same place as it was on Tuesday. The Hong Kong Hang Seng Index rose slightly by 0.3%. According to the data, the PMI index in the Chinese services sector in the second month of summer became lower, the reason for which was a drop in demand from foreign customers, which in turn was caused by new outbreaks of coronavirus infection in the country. Thus, the indicator dropped to 54.1 points, while a month earlier it was able to reach its maximum value over the past ten years at 58.4 points. Despite this, so far there is no big cause for concern, as the indicator continues to remain above the strategic level of 50 points, which indicates growth in the industry.
The general index of business activity of the PRC also dropped at 54.5 points in July 2020 after rising to 55.7 points in June.
Japan's Nikkei 225 Index fell by 0.3%.
South Korea's Kospi index also dropped 0.3%.
Australia's S & P / ASX 200 index went a little further and sank 0.6%.
A positive mood reigns on European stock exchanges on Wednesday, which makes the main indicators move up. Corporate reporting was so good that it was able to provide significant support to the markets.
The overall PMI of the Eurozone rose sharply to 54.9 points, while more recently it was still at around 48.5 points. However, the PMI in the services sector, on the contrary, showed a slight decrease: from 55.1 to 54.7 points.
The overall index of the largest enterprises in the Stoxx Europe 600 region rose 0.4%, which allowed it to rise to 364.86 points.
The UK FTSE 100 Index went up by 0.66%. The German DAX index rose 0.56%. France's CAC 40 Index rose 0.55%. Italy's FTSE MIB also rose 0.27%, while Spain's IBEX index jumped 0.47%.
