the Dow (( The increase of 580 points, or 2.4%, increased and the stock market in general recovered – spurred on by optimism about the continued reopening of the economy and a potential new vaccine against coronaviruses . The Dow Jones has climbed above 25,000 points, a level it has not closed since March 10. )
the S&P 500 ((, which is the widest measure on Wall Street, traded 1.9% higher and exceeded 3000 points. It has not closed more than 3,000 points since early March. )
Although the New York Stock Exchange is largely a symbolic site – stocks are traded digitally – reopening after an unprecedented two-month hiatus indicates that some things are returning to normal. The NYSE prosecution closed on May 18, after the city closed to limit the spread of the coronavirus. It was the first time that the New York Stock Exchange had operated entirely electronically.
Boosting market optimism Tuesday, US biotech company Novavax (( announced that it is starting a human trial for a Covid-19 vaccine candidate in Australia. The company’s shares opened 16% more. )
Memorial Day trips, which also helped boost investor sentiment, were slightly higher than in recent weeks, giving markets hope that business will pick up. Travel and leisure businesses were among the strongest on Tuesday, as local economies continued to reopen gradually across America.
On the economic front, consumer confidence in the US stabilized in May, according to a Conference Board report released on Tuesday. The confidence index fell to 85.7, its lowest level in nearly six years in April – but returned to 86.6 in May. As consumers’ assessment of the current state of business and the labor market continued to decline, their short-term prospects have improved due to the reopening of the economy.
But even if some economic data begins to point upwards, there are still many red flags.
Unemployment is at its worst since the Great Depression, with millions of Americans laid off or on leave due to the pandemic. And while the decline in consumer confidence seems to have bottomed out, “the uneven path to recovery and the second potential wave should keep a cloud of uncertainty over consumers,” said Lynn Franco, senior director of economic indicators at the Conference. Board.
Meanwhile, in Washington, policymakers have pledged to continue boosting the economy to stimulate a collapse.
White House economic adviser Kevin Hassett said on Friday he expected Congress and President Trump to agree on a “fourth wave” of economic recovery “as soon as possible” .
“Risk appetite has improved in recent months, partly on hopes for a vaccine, but mainly due to expectations that the massive central bank and government stimulus plans announced in response to the pandemic Covid-19 will fuel a rapid recovery in demand, “said Fawad Razaqzada, market analyst at ThinkMarkets.
All of this positive sentiment in the market is weighing on traditionally safer bets like gold, the US dollar and US Treasuries.