Wall Street Goes Bullish on Strong Services Sector amidst Hope of China’s Recovery

UTC by Benjamin Godfrey · 4 min read
Wall Street Goes Bullish on Strong Services Sector amidst Hope of China’s Recovery
Photo: Depositphotos

Last week’s growth in Chinese markets has spiked a bullish run in U.S Wall Street. Hopes for a full economic recovery are gaining momentum.

Wall Street experienced a boost in its stocks on Monday despite the rising number of new cases of COVID-19 across the United States. The bullish run on Wall Street comes as a result of hopes in China’s economic recovery which will contribute to global business growth. The new stock jump from reports shows that the Institute for Supply Management’s (ISM) non-manufacturing activity index almost returned to its pre-COVID-19 pandemic levels last month, reaching 57.1, the highest since February. Just to compare: in May it was 45.4.

The Chinese stock market has jumped by about 5% and has been experiencing an uptrend with the Shanghai Stock Exchange rising by 6% in the past week. A similar rise has been shown across all markets following reports that the government is using state media to induce growth. Not minding the source of the boost, the continuous growth of the Chinese market will have a ripple effect in several other economies that have a part or whole reliance on China. 

How U.S. and Chinese Economies Interrelate

The United States and China have a long-standing trade agreement that makes for mutual reliance on each other over the years. Today, the U.S.-China trade relationship actually supports roughly 2.6 million jobs in the United States across a range of industries, including jobs that Chinese companies have created in America. And as the Chinese middle class continues its rapid expansion over the next decade, U.S. companies face significant opportunities to tap into a new and lucrative customer base that can further boost employment and economic growth. Economic data show that nations trading closely with China outperform nations with less integrated trade ties, and this expects this trend to continue despite the current trade war between both countries.

The Chinese economy has proliferated industries over the past decade and serves as the perfect destination for individually manufactured products that get assembled in China. As of today, the majority of the top U.S. companies including Microsoft Corporation (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), Tesla Inc (NASDAQ: TSLA), and lots more have crucial operational bases in China. The interrelationship between the United States and China thus has the potential to cause a commemorative growth as Wall Street is experiencing today.

Tickers in U.S. Stock Growth

As reported by Reuters, a slew of upbeat U.S. data recently, including a record rise in monthly payrolls, has powered the Nasdaq Composite (INDEXNASDAQ: .IXIC) to all-time highs and has driven the S&P 500 (INDEXSP: .INX) up more than 40% from its March 23 closing low. The Dow Jones Industrial Average (INDEXDJX: .DJI) rose 459.67 points, or 1.78%, to 26,287.03, the S&P 500 gained 49.71 points, or 1.59%, to 3,179.72 and the Nasdaq Composite added 226.02 points, or 2.21%, to 10,433.65.

Tesla Inc (NASDAQ: TSLA) though has reduced sales in the U.S. markets, the electric car maker was able to boost sales looking towards the Chinese market with the opening of its Shanghai Factory with an overall 13.5% jump. Other companies such as Amazon.com Inc (NASDAQ: AMZN), Uber Technologies Inc (NYSE: UBER) also experienced significant upticks.

Wall Street Hopes for Complete Economic Recovery

The United States is the worst-hit nation from the coronavirus disease. While the hope of a vaccine looks far away, new cases keep getting discovered each day. The growing concern for the probable effect of increasing COVID-19 surge gives a justifiable level of uncertainty in the market. The figures of today do not necessarily reflect this but the scare is there.

In the drive for regaining complete economic balance, the upcoming presidential elections may further cause a polarizing effect that may affect the COVID-19 damaged economy. As the weeks roll by, we would know if a sound growth in the economy today will help withstand further strain the economy will experience in the future.

Business News, Indices, Market News, News, Stocks
Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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