If there were doubts about the ability and willingness of investors to continue to pull on US indices, almost against everything and everyone, Wednesday’s session dispelled a good deal of these uncertainties. After Wall Street was pessimistic about the possible consequences of global trade from the Coronavirus epidemic last week, the last three sessions not only cancelled the losses but also pulled the S&P500 to new historic highs after yesterday. All that needed is the possibility of a virus treatment or vaccine (2019-nCoV) coming soon, as well as and perhaps more importantly, the decision of the Central Bank of China to reduce interest rates, not only this week but most likely also in the February 20, with the intention of mitigating the negative effects of the temporary shutdown of many businesses in the country.
Photo by Dario.
Another important source of optimism, especially for the North American market, was the numbers of private employment, which removed from the table, the risk of the world’s largest economy entering a phase of less robust labour market, the main pillar of growth. Economic growth and consumer confidence in recent years. But if the trend on Wednesday was unquestionably upward, the outlook was not balanced with the technologies lagging far behind the rest of the market, largely because of Tesla, which after a significant appreciation movement in the last four months, in which the price quadrupled in value, yesterday it hit a wall and its value shrank 17%, after the company announced that deliveries of its Model 3 sedan in China are delayed because of the Coronavirus epidemic.
Today it will be interesting to gauge how Wall Street will behave, will it extend the mark of new historical highs or pause for a new start on Friday when the non-farm payrolls leave? For now, the sentiment is neutral with China’s decision to reduce some tariffs on products imported from the USA to give the most optimistic motto.
