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U.S. stock markets rose across the board on Wednesday, with corporate financial reports generally better than expected to boost market sentiment. As of the close, the Dow Jones Industrial Average rose 286.01 points, or 0.83%, to 34798.00 points, the Nasdaq rose 0.92% to 14631.95 points, and the S&P 500 Index rose 0.82% to 4358.69 points.
Market Overview
Data released by the U.S. Centers for Disease Control and Prevention (CDC) show that in the past two weeks, new coronavirus pneumonia cases in the United States have increased by 75%, a seven-day average of nearly 30,000 new cases per day, but deaths Rates are well below levels seen during the worst of the pandemic, with about 68% of adults currently vaccinated.
Due to opposition from Senate Republicans, the debate on the infrastructure bill in the U.S. Congress originally scheduled for today was postponed. Republicans hope to finalize the bill and obtain more details before starting the debate. Senate Democratic leader Schumer called for another vote next week on whether to start discussing the draft infrastructure legislation.
U.S. stocks fell sharply on Monday, but market sentiment improved in the following two trading days and erased the previous decline. Matt Maley, equity strategist at Miller Tabak, is relatively cautious, believing that the market will still be volatile and experience intermittent dives. “What we see here is an early warning signal for correction, considering inflation "With the spread of the epidemic, the market may be in this situation at the end of August, September, and October," he said.
Capital Economics Assistant Economist Bethany Beckett released a report saying that although it is difficult to predict the future path of the epidemic, the mutant virus is currently not expected to pose a major threat to economic recovery, at least in developed countries. Overall, we maintain the view that the absolute value of U.S. economic growth will remain strong, and global economic growth will also remain above trend by the end of next year.
Sectors related to economic restart continue to be strong. American Airlines rose 4%, Norwegian Cruise Line rose 10%. Boosted by the rebound in oil prices, energy ETFs rose 3.5%, with Chevron rising 3.6% and Exxon Mobil rising 3.2%.
Affected by the lower-than-expected auction of 20-year Treasury bonds, mid- and long-term U.S. bond yields rebounded, and the 10-year U.S. bond yield rose 8 basis points to 1.295%, driving a rebound in bank stocks. Goldman Sachs , Citi , JPMorgan Chase , Wells Fargo all increased by more than 2%. Bank of America Global believes that the rebound in the 10-year U.S. Treasury bond may have more room before the end of the month. As the "overbought" condition eases, it will rebound to 1.35% in early August.
Coca-Cola rose 1.6%. The beverage giant's second quarter revenue was US$10.13 billion, a year-on-year increase of 41.1%, exceeding pre-epidemic levels. Coca-Cola raised its full-year sales and profit forecasts as the reopening of theaters, restaurants, stadiums and other venues will continue to drive a rebound in beverage demand.
Johnson & Johnson rose 0.6%. The company's second-quarter revenue was US$23.31 billion, and adjusted earnings per share were US$2.48, both exceeding market expectations, and it raised its full-year performance guidance. Johnson & Johnson predicts that the new crown vaccine will contribute US$2.5 billion in revenue throughout the year.
Large technology stocks rose more or fell less, Facebook rose 1.3%, Google rose 1.1%, Microsoft rose 0.7%, Amazon rose 0.3%, Apple fell 0.5%, Netflix fell 3.2%, The company expects to add 3.5 million paying users in the third quarter, which is lower than market expectations.
In terms of Chinese concept stocks, Pinduoduo rose 2.2%, JD.com rose 1.9%, Baidu rose 1.5%, Alibaba rose 0.2%. New car-making forces performed well. NIO rose 5.9%, Xpeng Motors rose 7.6%, and Li Auto rose 8.7%.
International oil prices rebounded sharply, and crude oil inventories in Cushing, Oklahoma, USA fell to the lowest level since the beginning of 2020, boosting market sentiment. The front-month contract of WTI crude oil rose 4.6% to close at US$70.30/barrel, and the front-month contract of Brent crude oil rose 4.2% to close at US$72.23/barrel.JPMorgan Chase said that although OPEC+'s increase in production and the resurgence of global epidemic risks have hit oil prices, the basic situation of supply and demand driving up oil prices has not changed, and it continues to be optimistic about the performance of oil prices in the second half of the year.
Gold prices edged lower on Wednesday as rising U.S. Treasury yields and a rebound in stocks dented safe-haven demand.
COMEX The August gold contract closed down 0.4% at $1,803.40 per ounce.
The United States has experienced the shortest recession in history
The Business Cycle Dating Committee of the National Bureau of Economic Research announced this week that the economic recession that began in March last year ended two months later, becoming the shortest economic recession in American history. The recession ended the longest economic expansion in U.S. history, which began in June 2009 and lasted 128 months.
Economists from the Economic Cycle Dating Council said in a joint statement that the latest recession ended in April 2020 because the economy reached its lowest point in terms of employment and output at that time. The U.S. economy has improved since then, although in many ways it remains well below where it should be. Data show that in March and April last year, the rapid deterioration of the epidemic caused about 22 million Americans to lose their jobs across the United States, triggering concerns about the possibility of a new economic depression. The U.S. Congress and the White House subsequently approved the first large-scale relief bill to Keeping businesses and families afloat. 2.8 million people returned to work in May 2020, and approximately 15 million people returned to work over the following year.
However, a variety of factors are dragging down the job market recovery process. According to the June non-farm report released by the U.S. Department of Labor, about 9.3 million Americans are still unemployed, of which nearly 4 million have been unemployed for more than 27 weeks, an increase of 2.9 million from February. U.S. Census Bureau Data collected from June 23 to July 5 show that approximately 7.5 million Americans are not working because they are taking care of children.
Federal Reserve Chairman Jerome Powell said at a congressional hearing last week that the U.S. economic recovery is "far from complete." Powell believes that the labor market still has a long way to go to meet the standard of "substantial progress". At this stage, lower-wage workers and major minority groups bear the greatest burden, and overall participation rates remain low.
"Job gains should be strong in the coming months as public health conditions continue to improve and some of the pandemic-related factors currently affecting them diminish," he said.
