On Monday, the broader markets surged upwards while putting aside the concerns of the rising coronavirus cases. With Monday’s surge, the Dow is now 20% up from its COVID-19 sell-off low of 18,500.
The U.S. stock market started this week on a positive note with markets rallying on Monday, March 30. The stock market, as well as indexes like Dow Jones, has surprised investors with its upward move despite the rising coronavirus cases in the country.
At press time, the total COVID-19 cases in the U.S. have surged pass 164,000 almost double to China. Of this, New York alone contributes to over 66,000 cases in total. However, Monday’s rally comes amidst the extended measures from the government last week.
On Monday, the Dow Jones Industrial Average surged 690 points or 3.19% to climb above 22,327. The S&P 500 climbed 3.4% while the Nasdaq Composite also surged 3.6%. The Wall Street rally was led by tech giants like Alphabet Inc (NASDAQ: GOOGL), Amazon.com Inc (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT).
With Monday’s surge, the Dow is now 20% up from its coronavirus sell-off low of 18,500. Speaking to CNBC about this recovery, Dave Albrycht, chief investment officer at Newfleet Asset Management, said:
“Right now, risk assets are pricing in a V-shape recovery. Now, do I believe that’s going to happen? I think that’s highly dependent on whether they come up with some type of vaccine, how long does this go on for and whether people start going back to work once these peaks.”
Trump’s Coronavirus $2 Trillion Fiscal Stimulus Is a Booster
Last week, the Senate passed a bill, signed by President Donald Trump, of releasing $2 trillion as emergency fiscal stimulus measures. This amount shall be released by the U.S. Treasury in the next two weeks for individuals and families severely impacted by the economic crisis.
The unemployment tally has reached a massive 3 million which is nearly five times the 2008 financial crisis. However, the Federal Reserve has also stepped in announcing a series of programs. One of the most important Fed measures as per investors is its open-ended asset-purchase program for buying corporate bonds.
It looks like the damage has been already priced-in in the market correction and there are several reasons behind the rising coronavirus cases. Ken Berman, the strategist at Gorilla Trades, said:
“Bulls staged an epic comeback. Despite the rally … the uncertainty regarding the length of the necessary, but economically damaging global lockdowns continues to weigh on risk assets. The technical picture continues to be bearish across the board, despite the mid-week surge in stocks, with all of the key trend indicators still pointing lower”.
Coronavirus cases across the globe are on the rise. The total COVID-19 cases worldwide have reached 685,000. This Sunday President Donald Trump said that the national security guidelines have been extended to April 30th. The President has also hinted that the COVID-19 death rate could peak in two weeks. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has warned that total deaths due to the coronavirus in the U.S. can be as high as 200,000.
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