Wall street rises more than 1% after end session on Tuesday in red. However, investors re-enter the market and drive the S&P 500 down to the level of 2,950 – 3,000 points, a very important technical resistance zone. Furthermore, the Nasdaq It exceeds 9,300 points and continues to approach its all-time high in February (9,838 integers).
Analysts Pimco, the world’s largest bond manager, anticipate that the US Congress will approve a new stimulus plan ranging from $ 1 trillion to $ 1.5 trillion. For the past eight weeks, Congress has approved stimuli valued at $ 2.9 trillion, more than double the recovery efforts approved after the 2008 financial crisis.
The stimulus includes approximately $ 720 billion in funds for small businesses, $ 500 billion for individuals, nearly $ 300 billion in unemployment insurance, more than $ 250 billion for health care, and $ 150 billion for states and municipalities. Taken together, the answer is almost equivalent to 14% of US GDP.. This is another reason, along with the profits of the technology sector, which explains the strong rebound in Wall Street from the lows in March.
At the business level, the so-called values FAANG (Facebook, Amazon, Apple, Netflix and Google) continue to lead profits. For example, Amazon It has set a new record high at $ 2,489 and accumulates a 34% appreciation so far this year.
Also, the chip maker Analog Devices It rebounds 8% after exceeding forecasts with its results, which drives the Philadelphia Semiconductor Index 3%.
And the actions of Facebook shoot up 6%, to a new all-time record, on analyst optimism about the new e-commerce feature, dubbed Facebook Shops.
In other markets, the West Texas oil Up 2.5% to $ 32.77 after Monday’s rally in hopes of a revival in demand. Besides, the ounce of gold advances 0.17%, to $ 1,748, while the euro It appreciated 0.4% and was changed to $ 1.0968.
The European currency remains strong after announce on Monday France and Germany a fund of 500,000 million euros in subsidies for the countries hardest hit by the coronavirus. Finally, the profitability of 10-year American bond it falls slightly to 0.71%.
On a technical level, the S&P 500 has significant resistance in the “weekly bearish gap of 2,972 points“, an area that has been acting as resistance since the April highs. The main world indicator is trading at 2,964 points. Clearly exceeding 3,000 points would open the way to once again seek its historical maximum for February, in 3,393.50 points.
Art cashin, UBS chief operating officer on the floor, has advised to “closely follow” the battle between bulls and bears between 2,950 and 3,000 points. If they can’t finally push the S&P above that resistance, the market may star in a bearish tranche.