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FX.co ★ US stock exchanges experienced enthusiastic rise while Europe and Asian stocks went stably

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Analysis News:::2020-08-06

US stock exchanges experienced enthusiastic rise while Europe and Asian stocks went stably

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The Asian stock market began the day in a stably on Thursday. The main stock indicators preferred to stay in place and not show general dynamics. US stock market, on the other hand, was marked by steady and rapid growth.

Market participants are still worried about the US stimulus package. It should be noted that the country's situation with the coronavirus crisis remains tight, which indicates the urgent need to extend stimulus measures in order to create conditions for a faster and more comfortable economic recovery after the crisis.

So far, the securities market takes with enthusiasm only the very fact that the incentives will be ratified, but the decision-making process itself turned out to be too protracted, which may ultimately be reflected at the level of stock indicators. Every day the government and the opposition are getting closer to consensus, which pleases investors. According to experts, the relevant document should be signed no later than the end of this week.

However, the negativity in the market still exists which is mainly brought by the continuous spread in the number of COVID cases in the US and in several countries, which indicates that the second wave of the pandemic may still cover the world.

China's Shanghai Composite Index fell 0.73% Thursday morning, while Hong Kong Hang Seng Index sank even more by 1.56%.

Japan's Nikkei 225 Index is down by 0.55%.

South Korea's Kospi index went contrary to the negative trend of its colleagues and showed an increase of 1.08%.

The Australian S & P / ASX 200 supported the positive and rose 0.48%.

Wednesday's trading on the US stock markets was so successful that it even exceeded all the analysts' expectations. This is mainly due to the positive statistics and news on the vaccine against coronavirus infection.

The Dow Jones Industrial Average index immediately increased by 1.39% or 373.05 points, which moved it to the level of 27,201.52 points. This is the fourth time in a row that the indicator rushes up.

The Standard & Poor's 500 index increased by 0.64% or 21.26 points. Its level was within the range of 3,327.77 points, which also indicates the fourth positive day in a row.

The Nasdaq Composite Index supported the trend and increased by 0.52% or 57.23 points. This sent it to the 10,998.40 point mark. The growth of the index has been going on for six trading sessions in a row. In addition, during the day its value exceeded 11,000 points for the first time, which indicates the stability and firmness of its position.

On Wednesday, the largest US company Johnson & Johnson, which is also engaged in the production of medical products, announced that it is ready to conclude an agreement with the country's government on the production of drugs against coronavirus infection if the vaccine passes all the required clinical trials and proves its effectiveness. The contract amounts to $ 1 billion. Investors were enthusiastic about the announcement, which immediately boosted the company's shares by 8.8%.

Due to this, market participants did not even take great interest in US unemployment data from the ADP. According to the report, only 167 000 jobs were added in the private sector for the month of July which was weaker than the expected 1.5 million jobs in the preliminary forecasts. Against this background, the current figures look extremely unconvincing and even sparked some concerns, but market participants are in no hurry to react to this. Investors are tuned in to official unemployment data from the US Labor Department tomorrow.

Meanwhile, the statistics on US foreign trade balance can be viewed positively. Its deficit in the first month of the summer narrowed to $ 50.7 billion compared to the $ 54.8 billion in May. However, this positive is diluted with some disappointment, as experts expected better data. It was assumed that the decline could reach the level of 50.1 billion dollars.

Among other things, the US government began to put forward rather encouraging theories about economic growth in the second half of this year. For example, the deputy chairman of the main US regulator - the FRS - said that the second part of the year will be more successful for the country's economy, which will move to a sustainable recovery. Moreover, business activity may be the same as it was before the crisis associated with the coronavirus pandemic, and by the end of 2021 - step over pre-crisis indicators.

European stock markets, on the other hand, started the day with a negative recording a decline in almost all directions, the reason for which was the next portion of the reporting data of the companies and the result of the meeting of the main regulator of Great Britain - the Bank of England.

The general index of large enterprises in the European region Stoxx Europe 600 fell 0.42% to 363.64 points.

The UK FTSE 100 Index dropped 1.26% at once. While the German DAX index added insignificantly by 0.02%. France's CAC 40 index went down 0.6%. Italy's FTSE MIB Index declined 0.85%. Spain's IBEX 35 Index parted from 0.71%.

The reason for the rather serious negative was the decision of the Bank of England to keep the base interest rate at a low level of 0.1%. In addition, the volume of the government securities buyback program was left unchanged. It should be noted that like the previous one, the current level was within 745 billion pounds.

Among other things, the main regulator of Great Britain has revised the forecast for economic recovery in the country this year towards its improvement. So, according to the latest data, the decline should be no more than 9.5%, while earlier a rebound of 14% was approved.

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