By
Steve Muchoki
April 16th, 2024
Wall Street’s rally has resulted mostly from investors’ bet on a new fiscal relief package and a global vaccine roll-out that could lead to a faster economic recovery.
On Monday, three major US stock indexes scaled all-time highs. Nasdaq Composite climbed as high as 13,938.73, closing 0.59% up. Notably, since the beginning of February, this is not the first time when Nasdaq Composite hits a new record high. S&P 500 added 0.74% to close at 3,915.59. Dow Jones rose by 0.76% to 31,385.76. Both S&P 500 and DJIA rose for the sixth straight session, which is their longest gain since August.
Further, oil prices have seen significant growth, which has led to a surge in energy stocks. For example, Exxon Mobile Corporation (NYSE: XOM) stock has gained 15.98% within the last 5 days. Yesterday, it closed 4.30% up at $52.27 per share. Shares of Chevron Corporation (NYSE: CVX) are also up, with a 5.87% rise within 5 days. CVX stock closed 0.24% up yesterday, $91.48 per share.
Other big names like Tesla Inc (NASDAQ: TSLA), Walt Disney Co (NYSE: DIS), Twitter Inc. (NYSE: TWTR), Uber Technologies Inc (NYSE: UBER) are also up ahead of their earnings reports this week.
New Relief Package and Vaccine Optimism Push Nasdaq Composite High
Wall Street’s rally has resulted mostly from investors’ bet on a new fiscal relief package and a global vaccine roll-out that could lead to a faster economic recovery.
Last week, Congress passed a measure to bring President Biden’s $1.9 trillion relief package closer to passage into law. On Friday, the measure brought the initial $1.9 trillion almost completely intact: additional $1400 stimulus checks, increases to child tax credits, and extensions to pandemic-related unemployment benefits, among other things.
CMC Markets UK analyst David Madden stated:
“Stock markets are showing modest gains this afternoon as dealers are hopeful the Biden administration will sign off on the $1.9 trillion relief package as a way of stimulating the US economy. At the back end of last week it was revealed that Democratic politicians set in motion a plan to implement the proposed $1.9 trillion spending plan without support from Republicans… Janet Yellen, the US treasury secretary, predicts the $1.9 trillion spending programme will bring about full employment by the end of 2022.”
In addition, investors hope that progress in vaccination efforts will bring the economy back to normal very soon. In the United States, at least 32,780,860 vaccine doses have already been administered so far. The latest vaccination rate there is 1,470,823 doses per day on average. At this rate, it will take an estimated 10 months to cover 75% of the population with a two-dose vaccine. According to Biden’s administration, they are working to expand the vaccine supply to enhance the process. Notably, the daily average of new infection cases is moving lower, which is also good news.