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The Nasdaq 100 index showed a sharp recovery after the market crash and made a new intraday record on Thursday. Analysts are turning bullish over the reopening of the economy with many saying that the worst is behind us.
It had been a great start for the markets to June 2020 with three consecutive day jumps starting Monday, June 1. However, on Thursday, the stock market saw some minor correction ending its three-day winning streak.
Earlier this week, the stock market indices started on a very positive note responding to the reopening of the economy after a long shutdown. Laster, an industry report showed that the job losses for May were much less than expected. This drove the investors’ optimism even higher continuing the market rally. Investors were rejoicing despite the rising COVID-19 cases and the ongoing civil unrest in the country. It was clear that investors were focusing only on the economic reopening after the coronavirus economic setback.
On Thursday, stock market indices entered a marginal correction. The Nasdaq Composite (INDEXNASDAQ: .IXIC) slid 0.7% closing the day at 9,615.81. The S&P 500 (INDEXSP: .INX) slid 0.3% to 3,112.35 levels. On the other hand, the Dow Jones Industrial Average (INDEXDJX: .DJI) managed to end the day 0.1% positive closing at 26,281.82.
The Nasdaq 100, comprising of the top 100 stock of Nasdaq Composite, hit an intraday record high. However, it ended the day 0.8% lower. During the market crash of March 2020, the Nasdaq Composite plummeted nearly 30%, however, it has surged nearly 40% since then. Amazon.com Inc (NASDAQ: AMZN), PayPal Holdings Inc (NASDAQ: PYPL), Costco Wholesale Corporation (NASDAQ: COST), and PepsiCo Inc (NASDAQ: PEP) have been the top performers driving Nasdaq 100 back to its early 2020 levels.
On the other hand, all of the tech companies seemed under pressure. Companies like Facebook Inc (NASDAQ: FB) and Netflix Inc (NASDAQ: NFLX) corrected nearly 1.6%. Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and Apple Inc (NASDAQ: AAPL) were both down by 0.8% whereas Amazon closed 0.7% lower.
Stock Market Analysts Remain Optimistic
The coronavirus pandemic has given some serious blows to the global economy. The total jobless claims in the U.S. have spiked to 21.5 million with more and more Americans filing for unemployment every week. However, with the economy reopening, some experts and analysts think that all the worst is now behind us.
Some optimistic analysts think that this might be the beginning to the end of the recession. Brad McMillan, chief investment officer at Commonwealth Financial Network, wrote:
“May could well end up being the turning point for the viral crisis. The month ended with the virus seemingly under control and with the economy reopening faster than expected. June will tell us whether that trend continues. But right now? Things look much better than we could have expected a month ago.”
With the recent opening of the economy, the banking and aviation stocks, in particular, have given a good response. On the other hand, the European Central Bank has also extended its pandemic stimulus by an additional 600 billion Euro. This takes the total stimulus to over 1 trillion euros.
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