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In the New York Stock Market, the leading index continued to rise on expectations of an economic recovery from the US new stimulus package.
On the 8th (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 31,385.76, up 237.52 points (0.76%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 3,915.59, up 28.76 points (0.74%) from the battlefield, while the technology stock-oriented NASDAQ index closed at 13,987.64, up 131.35 points (0.95%).
All three indexes rewritten their all-time highs.
The market watched the progress of US stimulus measures, the performance of major companies, and the spread of the novel coronavirus infection (Corona 19).
Investment sentiment across the asset market has improved even further as the US Congress is expected to introduce large-scale new stimulus measures in the near future.
The US Senate and House of Representatives passed a budget resolution last week.
This is a measure that enables the introduction of a $1.9 trillion stimulus package requested by President Joe Biden through budget adjustments that only require the consent of the congressional majority.
Even if the Republican Party disagrees, the Democratic Party alone can introduce stimulus measures.
Democrat-led committees of the House of Representatives are releasing outlines of plans to be included in the new stimulus package.
It included $14 billion in support for airline employees’ wages and plans to expand child tax credits.
It is reported that the Democratic Party plans to complete the introduction of new stimulus measures in February.
US Treasury Secretary Janet Yellen also repeatedly urged Congress to deal with a $1.9 trillion stimulus package in an interview the previous day.
“If Congress approves the stimulus package, it could go back to full employment next year,” said Yellen, and said there was no reason to suffer from the slow economic recovery.
As it became known that airline support was included in the plan being promoted by the Democratic Party, the stock prices of major airlines rose significantly.
United Airlines rose more than 5.2%.
Amid high expectations for stimulus measures, the strong earnings of companies are also a factor that continues the rally.
According to the factset, 81% of the 295 S&P 500-included companies that reported earnings up to last week reported net profits that exceeded market expectations.
Accordingly, the market’s expectations for future performance such as the first and second quarters of this year are also increasing.
The calming down of the Corona 19 situation in the US also supported investment sentiment.
Last week, the number of new cases in the U.S. was estimated to have decreased by about 25% from the previous week.
The number of new confirmed cases on a weekly basis decreased for 4 consecutive weeks, and last week’s decline was the largest since the pandemic began.
The rise in U.S. Treasury yields and widening short- and long-term interest rates are also positive for the stock market.
The widening of the short- and long-term interest rate gap is considered a representative signal of economic recovery.
It also positively affects the interest income of financial institutions such as banks.
If interest rates rise, the valuation burden on the stock market could increase.
In addition, Brent oil surpassed $60 per barrel for the first time since January of last year.
Meanwhile, Tesla’s stock price rose by 1.3% on that day.
Tesla said it had bought $1.5 billion worth of Bitcoin, and announced that it will be able to pay for the sale of its products in Bitcoin.
At Tesla’s announcement, the price of bitcoin also surged, breaking an all-time high, exceeding 44,000 dollars.
By industry, energy rose 4.17% thanks to rising oil prices.
Financial stocks rose 1.22% and technology stocks rose 1.04% due to the widening of interest rate differences in the short and long term.
The economic indicators released that day were good.
The conference board announced in January that the US employment trend index (ETI) reached 99.27.
It rose from 98.55 in December last year.
New York stock market experts expected the economic recovery expectations to continue to support the stock price.
“It’s still in a bull market,” said Michael Wilson, head of US equity strategy at Morgan Stanley. “The momentum is in the early stages of an increasingly strengthening economic recovery.”
“We continue to recommend the most favorable stocks when the economy improves as vaccines are available and everyday life resumes,” he added.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) recorded 21.24, up 1.77% from the previous trading day.
/yunhap news