The American stock exchange index Nasdaq Composite, grew by 1%, on Monday closed at a record high level, beating its top of August 6. The record-high level at the end of Monday's session in the US was 11.129.73 pts.
Already in June Nasdaq was the first of the main indices on Wall Street which recovered losses caused by coronavirus. It consists of companies that gained when people stayed at home and due to the transition of a large part of companies to remote working. This increased the demand for services from companies in the technology, IT or e-commerce sector, which has raised the index quotes.
Meanwhile, the S&P 500 index achieved approximately the record level of 19 February, while Dow Jones lost out mainly due to falls in the share prices of financial and industrial companies. Quite optimistic behaviour of investors on Wall Street comes with the failed attempt of negotiations between Democrats and Republicans. They focused on preparing a new relief package for workers affected by the COVID-19 epidemic after the $600-a-week support for the unemployed was stopped at the end of last month. Wall Street is apparently unmoved by broken negotiations, renewed tensions between the US and China and the ongoing pandemic.
According to the New York Times, the US reported just over 42,000 new COVID-19 cases, down from a weekly average of 51,523 cases per day. The total number of infections in the US has exceeded 5.4 million, which is about a quarter of the number of cases worldwide.
Moreover, the futures for the VIX index, the popular fear index, fell to its lowest level since the end of February, reaching 21.7 pts. As early as July, its levels reached over 30 pts, which may mean that in the near future investors do not see any factors that could disrupt the bull market.
Stock market optimism could also be added to the stock market bulls by American bank Goldman Sachs, which has raised its forecast for the S&P 500 index from 3000 pts. to 3600 pts. at the end of the year. This forecast is supported by the thesis that the American economy will grow faster next year than the market currently expects. According to GS, this is due to the approval of the vaccine for COVID-19 later this year and its wide distribution in the first half of 2021.
CFDs for US indices are available on the Conotoxia trading platform under the symbols US100, US500 and US30.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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