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The tech sector continues to drive market optimism despite the rising COVID-19 cases. Amazon has been the biggest beneficiary of government lockdown as the platform’s consumer spending has surged 60% year-over-year since the end of April 2020.
The U.S. stock market started the week on a positive note with Nasdaq Composite (INDEXNASDAQ: .IXIC) gaining 2.5% by closing. On the day end, the Nasdaq index was trading at 10,767 levels. With Monday’s rally that was boosted significantly by the tech sector, the Nasdaq Index was trading 20% higher year-to-date.
The S&P 500 (INDEXSP: .INX) also closed in positive with a 0.84% rise. Closing the Monday trading session at 3251 levels, the S&P 500 recovered all its early year losses during the March 2020 market crash. Since its 2020-low on March 23, the S&P 500 has rallied more than 47% to date.
The tech sector contributed to Monday’s market rally with Amazon dominating yet again. Shares of Amazon.com Inc (NASDAQ: AMZN) jumped 7.93% giving a closing at 3196.84 levels. Amazon has been the top-performing stock on Wall Street with more than 50% returns year-to-date.
The Coronavirus pandemic and the lockdown has provided a major boost to the e-commerce industry. There’s a major shift in consumer behavior as most people prefer to buy online instead of going out. Amazon has been leading the way of making the best of this opportunity. On the other hand, COVID-19 cases continue to increase on a daily basis. Hence the e-commerce will continue to see accelerated growth in the coming months.
As per the data from Facteus, consumer spending on the Amazon platform surged 60% year-over-year since the end of April. Since the start of 2020, Amazon has added $561 billion to its market cap which currently stands at $1.59 trillion.
Goldman Sachs Expects Further Rally in Tech Sector
Wall Street banking giant Goldman Sachs is majorly bullish for the Amazon stock journey going ahead. Goldman expects Amazon’s revenue numbers to surge further in the coming quarters.
As a result, Goldman Sachs gave a price target of $3800 for the AMZN stock, nearly 25% from the current levels. Considering the latest set of data, Goldman has increased Amazon’s North American revenue estimates by 48% year-over-year. This is 15% higher from its previous estimates of 33%.
Apart from Amazon, Monday’s market rally also saw other tech giants contributing their share. Tech giant Microsoft Corporation (NASDAQ: MSFT) gained 4.3% on the index. Apple Inc (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOGL) gained 2.1% and 3.1% respectively. Facebook Inc (NASDAQ: FB) and Netflix Inc (NASDAQ: NFLX) contributed over 1% gains each.
While the stock market continues to rally, the economic indicators are not so good. The rising COVID-19 cases are absolutely keeping the global economy on tenterhooks. The Trump administration has initiated some major economic measures over the last few months and pumped nearly $2 trillion in the U.S. economy. Besides, the government has also extended unemployment benefits with a $600 a week cheque. But these payments are set to expire later this month.
The market is pinning up its hopes for the next set of bills. Aneta Markowska, a chief financial economist at Jefferies said:
“There is a lot of uncertainty about the size and shape of the next bill, particularly on the consumer side.”
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