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Thursday, December 2, 2021

Signs of U.S. economic recovery push stocks higher

Driven by the declining unemployment rate and advances in Covid-19 treatments that give hope for economic recovery, investors pushed the U.S. stock market to a record high last week.

The S&P 500 Index is regarded as a benchmark for the health of American companies. It rose 2% in the week ending Friday, its best weekly performance in four and a half months, and set a new high for the third consecutive week. -Time is high.

After Pfizer announced that its antiviral drug had successfully reduced the rate of hospitalization caused by Covid-19 by 90%, companies that were hit during the coronavirus pandemic (such as airlines, cruise operators, and casinos) led the rise in the index.

Evidence that the US economy is emerging from the downturn caused by the pandemic has further boosted market sentiment. The latest employment report shows that after months of relatively weak growth, employment growth in almost all industries has rebounded. More than 500,000 new jobs were added in October, and the unemployment rate fell to 4.6%, exceeding economists’ expectations.

Index and benchmark re-adjusted line chart shows that Wall Street hit a record high after U.S. job growth rebounded

Kristina Hooper, chief global market strategist at Invesco, said: “We are returning to normal.” “We have not fully done this yet, but we are definitely moving in the right direction. Growth is accelerating again, thanks to Covid treatment. new development.”

Scott Gottlieb, former director of the US Food and Drug Administration and Pfizer board member, said on Friday that the pandemic may end in January.

The results announced by Pfizer on Thursday added to Merck’s results, that its own pills reduced hospital admissions by 50%.

Live Nation Entertainment held live concerts restricted by social restrictions during the pandemic. This week it rose by more than 20%. This is the largest increase since the Fed’s first intervention in the financial market to calm the economic downturn in March 2020. Popularity. Cruise operator Royal Caribbean is also one of the companies with the biggest gains this week, with an increase of more than 14%.

“We have entered a new phase of the pandemic,” said Rebecca Patterson, head of research at Bridgewater Investment, adding that the central bank’s cautious comments this week supported the stock market’s volatility.

On Wednesday, the Fed took an important first step to end its crisis support for financial markets during the pandemic.

The U.S. Central Bank announced that it will begin to reduce its $120 billion monthly asset purchase program, with the goal of completely ending the stimulus program in the second half of next year.

This decision is not a surprise to investors, who have been waiting for months of guidance because deliberations among Fed officials have been delayed.

Federal Reserve Chairman Jay Powell (Jay Powell) once again assured that the Fed will take a patient attitude when raising interest rates, which will also help ease investors’ concerns that substantial measures will be taken to raise borrowing costs.

“He is doing everything he can to avoid confusion,” Hooper said.

Additional reporting by Nicholas Megaw and Kate Duguid

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