Economists from Goldman Sachs Group have revised their Q1 GDP forecast to see a growth of 5% though earlier they expected a 3% increase.
In a dramatic u-turn, President Donald Trump has finally assented to the COVID-19 stimulus bill that has been agreed upon by lawmakers in the past weeks sending the stock markets to a record close on Monday. According to a report from The Street, the President signed a combined $2.3 trillion coronavirus relief and government funding package to support American families, businesses, and government agencies respectively.
On Monday, the three major US stock markets indices closed the first trading day of the last trading week with positive gains. The Dow Jones Industrial Average (INDEXDJX: .DJI) added 204.10 points or 0.68% to close at 30,403.97. The Dow Jones surged to an intraday high of 30525 after adding 326 points or 1.1%. The market also showed strength as expressed in the S&P 500 Index (INDEXSP: .INX) which rose 0.87% adding 32.30 points to close Monday’s trading session at 3,735.36. The Nasdaq Composite (INDEXNASDAQ: .IXIC) was not left behind in the bullish rallies as it edged upwards 0.74% adding 94.69 points to close at a record 12,899.42.
The rally in the Dow Jones Industrial Average was led by Apple Inc (NASDAQ: AAPL) which surged 3.58% to close at $136.69 per share. American diversified multinational mass media and entertainment company Walt Disney Co (NYSE: DIS) also helped push the Dow up with a gain of 2.95% to close at $178.86. The rallies in the Dow Jones were also complemented with the growth recorded in payment services giant Visa Inc (NYSE: V) which saw a boost of 1.88% to close Monday’s session at $212.63.
The COVID-19 stimulus bill signed which is about $900 billion in value will see each American families get a $600 paycheck with new allocations that is approximately $325 billion scheduled to replenish the Paycheck Protection Program for small businesses.
Goldman Sachs: Stock Markets to Bounce in 2021
Economists from Goldman Sachs Group Inc (NYSE: GS) lead by Jan Hatzius have revised their Q1 GDP forecast to see a growth of 5% from the earlier projected 3%, citing the boost of consumer spending will be ensured with the $900 billion stimulus package .
The economists wrote in a note:
“While the income effects of the fiscal package will be very front-loaded, we expect the impact on consumer spending to be more evenly distributed throughout the year. The virus resurgence and continued state and local restrictions will likely weigh on spending in the short term, leading to more pent-up demand later in the year following mass vaccination.”
According to a Yahoo Finance report, the economists also assume that full-year economic growth will be greater than in his previous assumption. The group sees annual growth of 5.8% in the US, up from 5.3% previously.
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