Stocks showed impressive rally on Monday with Amazon (AMZN) and Apple (AAPL) leading tech stocks amidst expectations of the new stimulus package from the government.
It is a great week for markets across Wall Street as firms are recording upward trends following the lawmaker’s negotiation for additional stimulus packages. Since the economy reopened after the Q1 lockdowns, businesses have been fighting to make up for the massive losses they recorded during those trying times. While some tech and consumer-focused businesses are among the frontline beneficiaries (like Amazon and Apple), others that thrive on travels, or mass patronage as seen in parks remain affected as social distancing rules are still in place.
The first day of the trading week ended with remarkable gains that cut across the market. Market indices got a notable limp with the S&P 500 (INDEXSP: INX) gaining 0.7% to close at 3,239.41. The Dow Jones Industrial Average (INDEXDJX: .DJI) added 114.88 points, or 0.4%, to close at 26,584.77 and the Nasdaq Composite (INDEXNASDAQ: IXIC) rallied 1.7% to close at 10,536.27.
The gains recorded in these three indices are as a result of the upward rallies of their individual component stocks. Amazon.com Inc (NASDAQ: AMZN) and Apple Inc (NASDAQ: AAPL) lead the tech rallies. Amazon rose by 1.5% while Apple topped an impressive 2.3%. The AMZN rally comes after several analysts hiked their 12-month price targets on the e-commerce giants. Facebook Inc (NASDAQ: FB), Netflix Inc (NASDAQ: NFLX), Alphabet Inc (NASDAQ: GOOGL), and Microsoft Corporation (NASDAQ: MSFT) also ended the day higher as well.
Despite the rise in the number of COVID-19 victims, expectations are renewed with the U.S. government allocating an additional $472 million towards Moderna Inc (NASDAQ: MRNA) coronavirus vaccine research, a development that spiked the biopharmaceutical company’s stock by over 9%.
The coronavirus development is known to naturally impact market sentiments. Stocks are showing this rally partly as a result of the probable new stimulus package currently being discussed by Republicans with final decisions to be out on July 31st. The surge also took its drive from profitable earnings declarations by 80 out of 130 S&P 500 firms that have declared their earnings as of Monday morning according to Refinitiv. As reported by CNBC, Ed Yardeni, Chief investment strategist at Yardeni Research said:
“Stock prices have soared even as analysts’ consensus expected earnings estimates have plunged. These estimates have started to show signs of bottoming in the past few weeks. However, any recovery could be dampened or even aborted if the Covid-19 case count continues to mount and state governors slow or reverse the lifting of lockdown restrictions.”
Uptick on Gold and Bitcoin (BTC)
The importance of hold as the goto asset by investors amidst uncertain economic terrain that can cause recession has become more visible since the coronavirus broke out. Gold futures settled at an impressive $1,931.50 after an intraday high of $1,941.90 per ounce. Gold’s 1.8% rise on Monday puts the precious metal up by 26% year to date and has the potential to beat its 12-year record high.
The bullish rally has also seen the price of Bitcoin (BTC) move higher proportionately with the first digital currency surpassing the $11,000 mark on Monday. As the market rally continues, with positive strides by scientists working to develop a functional COVID-19 vaccine, the corresponding effect will continue to cause an uptick in the market provided wall street did not wake up to unprecedented market surprises.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.