Bullish close on Wall street (Dow Jones: + 1.18%; S&P 500: + 1.10%; Nasdaq: + 1.09%) thanks to last minute uptick in the banking sector and after the sharp falls on Wednesday, caused by the outbreak of the pandemic in the United States, tariff tensions and the high valuation reached by US equities. Bad macroeconomic data, such as 5% drop in GDP in the first trimester; and weekly unemployment claims worse than expected, have been discounted by the market during the day.
Banks have risen sharply after the Federal Deposit Guarantee Commission has confirmed that it will make it easier for banks to make large investments in funds, such as venture capital funds.
Also, banks will not have to reserve cash for derivatives traders between different affiliates of the same company, which could free up more capital. He KBW Banks Index It has risen 3.3% and has been the main driving force behind purchases.
On the negative, the fear of a flare-up, especially in the US, continues to influence market sentiment. Manzana, one of the flagships of the country and the technology sector, It has closed more stores in other states such as Florida as new spikes in infections have been confirmed.
"The market has been optimistic with the reopening of the economy and that return to the new normal, but the virus has other ideas in mind," admit the experts of the Advisor Alliance. "Stock markets have been hijacked again by the crossfire caused by the trade war and the pandemic"they add.
THE IMF ALERT
On the high valuation of Wall Street, the International Monetary Fund (IMF) has warned that the continued disconnect between financial markets and the real economy could lead to a correction on the world stock markets. A correction is defined as a drop of more than 10% in the price of an asset or an index.
"This disconnect between markets and the real economy increases the risk of another correction in share prices if investor risk appetite fades, posing a threat to recovery, "the IMF said in its updated report from Global Financial Stability.
"According to the models of the IMF's technical staff, the difference between market prices and fundamental valuations is close to all-time highs in most of the major equity and bond markets of advanced economies, although the opposite is true for stocks in some emerging market economies, "explained the agency, which this week has worsened its forecasts for the global economy and for Spain"
In other markets, the West Texas oil up 2.6% to $ 39.03. Besides, the ounce of gold falls 0.2% to $ 1,771, while the euro it depreciates 0.3% and changes to $ 1.1216. Finally, the profitability of 10-year American bond yields up to 0.67%.
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