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26.01.202113:45 Forex Analysis & Reviews: US stock indices break records despite absence of a decision on government incentives

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Nasdaq Composite and S&P 500 stock indexes reported record highs at the close of trading on Monday.

Exchange Rates 26.01.2021 analysis

Following the volatile session, the Nasdaq Composite increased by 0.7%, to 13635. 99 points. At the beginning of the day, the indicator immediately rose by 1.4%, then fell by 1.3%, and by the end of the session, it recovered again. The S&P 500 index gained 0.4% and stopped at 3855.36 points, while the Dow Jones sank 0.1%, to 30960.00 points

Exchange Rates 26.01.2021 analysis

According to the results of Friday's trading, the major US stock indices were mixed: the Dow Jones and S&P 500 fell, while the Nasdaq rose and renewed its record high. As for the overall results of the previous week, the US stock exchanges finished in positive territory: Dow Jones and S&P 500 increased by 0.6% and 1.9%, respectively, while the Nasdaq rose by 4.2%.

Such positive dynamics were facilitated by hopes for the adoption of a new package of state support for the economy after the inauguration of President Joe Biden.

The Senate Finance Committee, on Friday, unanimously supported the candidacy of the former Fed Chairman Janet Yellen for the post of US Treasury Secretary. This week, investors await the first meeting of the Federal Reserve for this year.

Meanwhile, doctors in the US and across the globe continue to record an increase in COVID-19 infections, but many analysts predict a return to economic recovery in the second half of 2021. Experts believe that the US economy may decline in the coming months, but will demonstrate a steady growth by the end of spring. The GDP of the United States this year may exceed 4%, and the country's economy will step over the dock level in the second half of 2021.

Investors are eagerly awaiting a massive release of corporate financial statements that will clarify which companies are surviving the coronavirus pandemic easily and which are struggling. This week, reports of about 20% of the S&P 500 companies and a third of the Dow Jones Industrial Average companies will be published.

Investors may soon face a rather difficult task as they will have to compare many multidirectional factors: mass vaccinations and new quarantines, as well as their impact on each company.

Market participants are now seriously concerned about disruptions in the supply of coronavirus vaccines. Pharmaceutical giant AstraZeneca said on Friday that shipments of its drug to the European Union will fall short of forecast. Obviously, vaccine introduction is not proceeding as quickly and smoothly as planned at the end of 2020.

This state of affairs, coupled with the proliferation of new strains of coronavirus, has contributed to the recent rally in technology stocks. Analysts say the tech sector should benefit from this situation, as many companies are moving to remote work, their employees have begun to actively use digital technology.

Thus, the shares of the company GameStop, which sells computer games, doubled on Monday, but later significantly lost growth and closed with an increase of 18%. GameStop has become the subject of a battle between bulls and bears, with intraday traders from the online forum Reddit acting as the bulls.

Shares of the owner of the cinema chain AMC Entertainment, which also attracted the interest of small investors, rose in price by 26%.

Meanwhile, investors continue to monitor the negotiations around Joe Biden's proposed stimulus plan. Last weekend, lawmakers discussed a $1.9 trillion state support package, and the discussion on it will continue this week.

At the auction on Monday, the sub-indices of 7 of the 11 industry sectors in the S&P 500 reported strong growth. The highest results were shown by the shares of the defense sectors, including utilities and the consumer goods sector of mass demand.

Apple shares gained 2.8% and reached their all-time high. Tesla's price also reached a record high, rising about 4%.

Data analyst Palantir Technologies was up 11.0% by the end of the trading session after gaining 21.0% during the day.

Twitter and Etsy shed 0.5% and 2.2%, respectively, despite solid gains in early trading.

The list of the fall was lead by securities of financial and oil and gas corporations. Shares of Chevron dropped 0.9%, Goldman Sachs lost 2.2%, which immediately affected the Dow Jones.

Shares of the specialized company TS Innovation Acquisitions, which is part of Tishman Speyer, gained 44.0%. Representatives of the company said that they intend to team up with the manufacturer of smart locks Latch.

Meanwhile, the pan-European Stoxx Europe 600 Index sank 0.8%. Experts explained the fall by reports that the authorities of France and the UK intend to tighten quarantine in connection with a new strain of coronavirus.

The yield on 10-year US Treasuries fell from 1.038% to 1.090% on Friday.

As for the results of trading on the Asia-Pacific markets, most of the Asian stock indices reported growth. The Shanghai Composite gained 0.5% and Hong Kong's Hang Seng gained 2.4% on a rally in the tech sector. South Korean Kospi gained 2.2%, Samsung Electronics added 3%, and chipmaker SK Hynix rose more than 5%.

At the close of trading in Hong Kong, China's most valuable internet company, Tencent Holdings, surged almost 11% to a record high.

Desarrollado por un Irina Maksimova
experto de análisis de InstaForex
© 2007-2024

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