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02.10.2020 02:45 PM
Optimism in the US stock market

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There was a clear growth in the US stock indices this early October: The Dow Jones Industrial Average rose by 0.13%, Standard & Poor's 500 by 0.53%, and NASDAQ Composite by 1.42%. Yesterday, the Dow Jones indicator also did not yield its positions and was able to increase by 1.2%, the S&P 500 by 0.83%, and the NASDAQ by 0.74%.

Recently, the US stock market has also been marked by optimism, although it is worth recognizing that the results of September still demonstrated a negative trend when compared with March's achievement.

On the other hand, shares of several major US companies also increased yesterday: PepsiCo shares rose by 1.6%, Ford Motor by 1.4%, Bed Bath & Beyond by 25.1%, and General Motors by 2.7%. However, Constellation Brands' quotes declined by 2.6%.

This week's discussion of a new package of measures to restore the US economy may alarm the market. If the agreement to support the economy will not be clearer, consumers may well cut their spending. Thus, this will negatively affect the US economy, which already needs serious recovery. Either way, consumption is the driving force and to support it, it is necessary to implement the second law on measures to rescue the US economy soon.

Against the background of the expectation of such a law, the Fed decides to extend the restrictions on the payment of dividends, as well as the ban on the repurchase of shares by the largest US banks for 3 months. The restrictions affected 33 US banks that have more than $100 billion in assets in stock.

The US unemployment statistics published last week showed that the number of Americans who applied for unemployment benefits for the first time was 837 thousand, while it was 873 thousand a week earlier.

The US population experienced a 2.7% decline in income in August when compared to the previous month. However, the expenses of the Americans increased by 1%.

In September, there was also a decline in the index of business activity in the US manufacturing sector (to 55.4 points), which reached 56 points in August. Analysts predicted the index to rise to 56.4 points.

Andreeva Natalya,
Pakar analisis InstaForex
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