The US stocks continue to trade on the positive zone Thursday morning following the positive trade on Wednesday which ended with growth of the main stock indicators, while some of which again managed to reach record levels. Both the S&P 500 and Nasdaq Composite once again stepped over their maximum values. The reason for the excitement among market participants was excellent corporate statistics, which turned out to be much better than preliminary forecasts.
Investors are still gearing up for a keynote speech by Fed Chairman Jerome Powell at a symposium in Kansas City this week. The said event usually brings together the heads of the world Central Banks, finance ministers, as well as leading scientists from the economy and the financial market. Investors expect Powell to open up about further strategy of the Federal Reserve System in the context of the coronavirus pandemic.
The most important part of the speech of the head of the regulator, which will be of particular interest to all market participants, should be the problem of increasing inflation. The Fed has long been expected to take certain steps to stabilize the situation in this matter.
There have been several hints appearing that the FRS and other central banks of the world see the solution to the problem in keeping interest rates at record low levels, as well as in the buyback of government bonds and other debt securities. This can play a decisive role in supporting the economy and restoring its growth.
For most of the last month of summer, the market has seen rather limited volatility. The Cboe Volatility Index, which just demonstrates it, has now generally moved to its lowest levels during the pandemic.
The statistics released to the press on Wednesday also had a positive impact on market participants. The volume of orders for durable goods in the country for the second month of summer increased by 11.2% at once compared to the previous figure. This means that the recovery of this sector is proceeding at a rapid pace. Analysts' preliminary forecasts were modest enough to expect growth by no more than 4.8%.
The Dow Jones Industrial Average closed Wednesday's trade with an increase of 0.3% or 83.48 points. Its current level is located at around 28,331.92 points.
The Standard & Poor's 500 index increased by 1.02% or 35.11 points, which allowed it to climb to the level of 3,478.73 points.
The Nasdaq Composite index jumped even more by 1.73% or 198.59 points, which moved it to 11,665.06 points.
Basically, such a good growth in stock indicators was provided by the rapid increase in the value of securities of companies in the technology sector.
Asian stock markets, on the other hand, traded not so very positively on Thursday morning. Major indices moved rather weakly and in different directions. All market participants slowed down their work before the speech of the head of the US Federal Reserve.
Nevertheless, there is also intra-regional news. The statistical data reflected an increase in the profits of the largest enterprises in the industrial sector of the PRC following the results of the second month of summer. It should be noted that growth continues for the third month in a row. The good results were driven by the recovery in the automotive sector, as well as the rise in demand in the electronics sector.
The total profit of industrial enterprises in China increased by 19.6% on an annualized basis. It turned out to be at 589.51 billion yuan, which corresponds to $ 85.56 billion.
China's Shanghai Composite Index went up 0.5%. The Hong Kong Hang Seng Index did not support this trend and dropped 0.9%.
Japan's Nikkei 225 index also went down by 0.4%.
South Korea's Kospi index continued its negative trend and fell 0.9%. Today, the Central Bank of the country decided to keep the base interest rate which is presently at a record low level of 0.5% per annum. At the same time, the country's main regulator revised its GDP forecast downward. According to the latest data, by the end of the year, the indicator is expected to fall by 1.3%. Note according to forecasts, a reduction of only 0.2% is expected as early as May of this year. Now, a deeper subsidence is noted.
The Australian S & P / ASX 200 index showed positive dynamics and increased by 0.1%.
Meanwhile, European stock exchanges also traded on the negative zone on Thursday. Major stock market indicators are in the red zone amid expectations of Fed Chairman Jerome Powell's speech.
In addition, market participants are waiting for statistics on new applications for unemployment benefits in the US. The new level of the state's GDP was revised taking into account the specification of the indicator.
The index, which demonstrates the level of entrepreneurs' confidence in the French economy, has grown substantially in the last month of summer. It moved to the level of 93 points, whereas earlier it was located at the level of 82 points. Thus, this indicator has taken its highest value over the past five months. At the same time, preliminary forecasts did not allow growth above 85 points.
The Stoxx Europe 600 Index of large enterprises in the European region fell 0.31% pushing it to 371.95.
The UK FTSE 100 Index parted from 0.33%. The German DAX index sank 0.25%. France's CAC 40 Index lost 0.55%. Italy's FTSE MIB Index declined by 0.77%. Spain's IBEX 35 index took the leader board falling 0.79%.
