US and Asian stocks rise, while Europe went irresolute
US stock exchanges closed Thursday’s trading with a substantial increase in the main stock indicators. The day before, it went through a slight correction and was not performing well. It somehow managed to gain back it’s lost positions on Thursday. Nasdaq was able to complete trading at its maximum level, which happened due to increased demand from investors for securities of companies in the technology sector.
At the beginning of the trading day, market participants were still under the heavy impression of the publication of the minutes of the July meeting of the Federal Reserve System, which reflected the very vague prospects for economic recovery in the country. The statistics also added pressure, which turned out to be an order of magnitude worse than analysts predicted earlier. Nevertheless, the main regulator of the state indicated that it is ready to take all possible and affordable measures that can provide broad support to the economy in order to recover from the crisis associated with the impact of coronavirus infection. However, the document does not state anything specific about what these measures will be. Of course, investors tensed after such controversial statements.
The statistics on the US labor market also added unpleasant feelings. Thus, the Ministry of Labor has published a new portion of statistics, according to which the number of applications for unemployment benefits last week, ended August 14, increased by 135,000 leaving to a total of 1.106 million. This came as a surprise not only to the markets but also to analysts, who for the most part argued that there should be a reduction in the indicator to 925 thousand units.
Greater fears emerged after the news that the index of manufacturing activity in Philadelphia for the current month was significantly lower than preliminary forecasts. The main regulator of Philadelphia – the Federal Reserve Bank – cited calculations according to which the indicator dropped to 17.2 points, while in the previous month it was already at a fairly low level of 24.1 points. The current drop has led to its minimum values over the past three months.
Still, there is a positive for market participants. It is primarily related to the fact that the United States of America intends to establish trade relations with China. Thus, the American authorities announced that they are ready to set a new date for negotiations in the near future on major issues that require urgent solutions. Of course, this does not mean yet that the conflict is over, but at least some steps towards a settlement have already been outlined.
In addition, it became known that companies in the technology sector have grown well in the first half of this year. Thus, the growth dynamics of Facebook Inc. accounted for 30%, Apple Inc. increased by about 60%, and the leader was Amazon.com Inc., whose securities rose in price by an average of 78%.
Traditionally, the tech sector has been good at supporting stock markets, forcing major stock indicators to move up. However, as some experts point out, the growth of tech companies has almost come to an end and will be extremely limited in the future. In the meantime, market participants do not attach too much importance to this.
The Dow Jones Industrial Average closed Thursday’s trading with an increase of 0.17% or 46.85 points, which moved it to the line of 27,739.73 points.
The Standard & Poor’s 500 Index rose 0.32% or 10.66 points. Its current level was 3,385.51 points.
The Nasdaq Composite index added 1.06% or 118.49 points, which allowed it to move to the area of 11,264.95 points. Thus, the indicator has renewed its record for the 35th time this year.
Asian stock markets also traded positively on Friday. Major stock market indicators jumped on news of the upcoming coronavirus vaccine release.
The drug against COVID-19, which is being developed by the US pharmaceutical company Pfizer in partnership with the German biotechnology corporation BioNTech, is scheduled to be launched on the market in October this year. This news even managed to overshadow the uncertainty of investors about the economic recovery and its growth in the near future, which was emphasized in the minutes of the US Federal Reserve meeting.
Japan’s Nikkei 225 Index is up 0.3% Friday morning. The level of consumer prices in the country was marked by an increase in dynamics by 0.3% on an annualized basis. Such a high rise has not happened since mid-spring. The main growth was in the food sector.
China’s Shanghai Composite Index rose 0.4%. The Hong Kong Index followed suit and rose more dramatically by1.3%.
South Korea’s Kospi Index became the leader of the recovery with an increase of 1.7%.
Australia’s S & P / ASX 200 was the only one in the red zone, dropping 0.2%. Here, investors are concerned that the government may not give the go signal for a deal to buy the second-largest milk producer Lion Dairy & Drinks from China Mengniu Dairy Corporation from the PRC. The reason for this decision may be an unpleasant incident that happened just recently: the Chinese authorities have launched an investigation into wines from Australia, as they suspect the producers of dumping.
Meanwhile, there are no uniform dynamics observed on the European stock markets: the main stock indicators rushed in different directions. The reason for the uncertainty was the preliminary forecasts for PMI in the EU.
The general index of large enterprises in the Stoxx Europe 600 region continued its growth Friday morning, which this time amounted to 0.31%. Allowing it to get to reach 366.76 points.
The German DAX Index gained 0.36%. France’s CAC 40 index rose 0.21%. Italy’s FTSE MIB index moved in the opposite direction and lost so far only slightly by 0.04%. Spain’s IBEX 35 index was marked by a similar loss of 0.04%. The UK’s FTSE 100 Index suffered the most, with a 0.27% drop.
The material has been provided by InstaForex Company – www.instaforex.com