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Despite the weakness of employment, the growing expectations of concluding stimulus measures
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The New York stock market closed at an all-time high with the anticipation of the conclusion of a stimulus package.
On 4th (Eastern US time), the Dow Jones 30 Industrial Average on the New York Stock Exchange (NYSE) closed at 30,218.26, up 248.74 points (0.83%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 3,699.12, up 32.4 points (0.88%) from the battlefield. The Nasdaq index, which focuses on technology stocks, closed at 12,464.23, up 87.05 points (0.7%).
The three share price indices reached all-time highs in terms of intraday and closing prices.
The Dow Index was up about 1% this week. The S & P500 index grew by approximately 1.7% and the NASDAQ by 2.1%.
The stock market has been waiting for news on the November employment indicators, on the negotiations on the economic stimulus plan and on the new vaccine against coronavirus infection (Corona 19).
It was found that the labor market was also hitting amid the worsening situation of Corona 19 in the winter.
The U.S. Department of Labor said in November that non-farm employment increased by 245,000. This is far less than the 440,000 increase in the market forecast compiled by the Wall Street Journal.
The November unemployment rate fell to 6.7% from 6.9% last month, in line with market expectations. However, the recovery in employment slowed, with the labor market participation rate dropping 0.2 percentage points from the previous month to 61.5%.
Although the indicators were negative, the stock market was quite bullish.
It is interpreted as a factor that has supported the equity market that the US list price has resumed discussions to define a new stimulus plan later this year.
When the Democratic Party stepped back to $ 900 billion from remaining at more than $ 2 trillion in stimulus packages, expectations for the conclusion of the negotiations rose. There was also a perception that slow employment indicators would put further pressure on the deal.
US President-elect Joe Biden urged the conclusion of a stimulus package, saying, “This situation requires urgent action,” with employment indicators in November.
House Speaker Nancy Pelosi and Democratic Senate Representative Chuck Schumer also argued that the urgency of concluding a stimulus package was again confirmed due to low employment.
An agreement on a limited scale is expected within this year.
However, it is still unclear whether the Republican Party, which has backed a smaller $ 500 billion stimulus package, will accept it.
There was also some disturbing news regarding the Corona 19 vaccine, but its impact on the market is limited.
It is reported that the supply of vaccines developed by Pfizer and Bioentech will only be half of the original estimate due to the problem of supplying raw materials.
However, the fact that large-scale production, such as 1.3 billion cycles, is expected to be possible next year, has alleviated anxiety.
Additionally, CEO Stefane Bancel Modena said he is confident of providing 500 million doses of the vaccine next year. It is also good that the results of a survey which showed that high levels of antibodies were maintained for at least three months after the announcement of the Modena vaccination.
The situation of Corona 19 in the United States is still unstable. Recently, the number of new confirmed patients, hospitalized patients and deaths has risen to all-time highs.
Per share, Pfizer’s stock price rose 0.6% that day. By sector, energy increased by 5.43% and the materials sector also increased by more than 2%. The technological shares increased by 1.02%.
Other economic indicators released that day were good.
The US Department of Commerce said the trade deficit in October reached $ 63.1 billion, an increase of 1.7% from the previous month. It was below the market forecast of $ 66.4 billion.
The Ministry of Commerce also announced that the trend of orders for factory materials in October increased by 1.0%. It was slightly above the market estimate of 0.8%.
Stock market experts have assessed that a positive market situation continues due to expectations of fiscal stimulus measures.
Luca Paolini, Pictet Asset Management’s chief strategist, said: “The market is slowing down a bit now, but the underlying trend is that the global economy is recovering. It’s hard to find what can change the optimistic outlook.” / Reporter Shim Woo-il [email protected]
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