New York stock market indexes hit new highs on Wednesday after new US president Joe Biden on the day of inauguration. Among the main indices, the broad S&P 500 index, the blue chip index Dow Jones and the technology-focused Nasdaq index closed to new records.
Biden’s inauguration was accompanied by strict security measures. A fence about three meters long with barbed wire had been erected around the U.S. Congress and its adjoining quarters, and the city was full of heavily armed soldiers and police.
For the first time, Biden rejoined the United States in the Paris Climate Agreement and repealed it Donald Trumpin the decision that the United States leave the World Health Organization (WHO).
Share prices have risen as a major stimulus is expected from Democrat-ruled Congress and Biden. Finance company Mediolanum Investment Fundsin chief strategist Brian O’Reilly says, according to The Wall Street Journal, however, shares in companies that serve earnings disappointments are easily acquired.
“Any company whose results are likely to fall short of forecasts, or whose results are even modestly disappointing, will be punished with a pretty harsh hand,” O’Reilly writes.
“A lot of optimism has already been priced in the shares,” he adds.
Especially technology stocks and streaming service Netflixin higher prices lifted the stock market.
Netflix’s share rose 16.9 percent when the company reported better-than-expected subscriber growth on Tuesday after the stock exchanges closed. The company’s stock has fared well as people stayed at home due to the coronary pandemic and diligently consumed streaming content. Investors were also pleased that the company said it would not need loan money for new productions in the future.
Other technology giants also rose in the wake of Netflix. Apple the share price rose 3.3 percent, Alphabet C share 5.4 percent and Facebook share 2.4 percent.
So far, US listed companies have reported better-than-expected interim results. The Wall Street Journal quotes analysis service Factset as saying 88 percent of companies that have already reported their results had reported better-than-expected interim results by Wednesday morning.
Analysts believe the uptrend will continue as they expect U.S. economic activity to recover this year and results to grow from their comparison periods.
“Low inflation, low interest rates and rising earnings support rising stock valuations,” the main strategy Terry Sandven financial giant U.S. Bank Wealth Management writes according to the WSJ.
The Dow Jones index rose 0.8 percent, the S&P 500 index rose 1.4 percent and the Nasdaq index two percent.
The 10-year interest rate on U.S. government debt was quoted at 1.083 percent after the stock market closed. One euro received $ 1.2115.
Source: Arvopaperi by www.arvopaperi.fi.
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