Wall Street set to poise for another rally after last night’s performance

Wall Street set to poise for another rally after last night's performance

People in Wall Street had a positive rally party yesterday. The Dow Jones had a stellar performance closing over 500 points while the S&P 500 revisited its key levels for the first time since March.

Dow Futures rise over 200 points in hopes of resuming this week’s rally. With the recent news about Novavax starting its first human study for its coronavirus vaccine, it seems that Wall Street is showing signs of hope. The Dow Jones also broke above 25,000 level for the first time since early March.

Jim Paulsen, chief investment strategist at the Leuthold Group told CNBC:

“For the first time in this crisis, we are being bombarded by good news […] The S&P 500 finally breaks above its 200-day moving average (3000) and more new vaccine drugs look promising.”

In addition, MKM Partners chief market strategist Michael Darda told CNBC that despite the market has been making a V-pattern upward recovery, people are still skeptical to continue their confidence in trusting Wall Street.

Wall Street set to poise for another rally after last night's performance

Banks led the S&P 500 rally

For the first time since March 5 in Wall Street, the S&P 500 was able to breach the 3,000 level briefly as many analysts believe that breaking above this level would trigger a long-term bullish course.

Yesterday, aside from the early news from Novavax announcing their vaccine trials, the S&P 500 was carried by the banking sector being boosted by the economy reopening.

Citigroup grew more than nine percent while JPMorgan gained 7.9% after CEO Jamie Dimon commented that the bank is now “very valuable” at current prices. The JPMorgan CEO added that he is not trying to predict the bottom since its earnings would take a hit in 2020 as loan losses increased amid the COVID-19 pandemic.

With the ups and downs of the relationship between the U.S. and China, instead of scaring Wall Street, the futures signaled investors to bet on the economy’s reopening.

Consumer confidence unexpectedly improved on economy re-opening

In other reports, The Conference Board released data indicating that the consumer confidence index rose to 86.6 this month compared to 85.7 in April. A Dow Jones poll expected consumer confidence to hit 82.3.

Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement that short-term expectations moderately increased as the gradual re-opening of the economy lifted consumers’ spirits.

As of May 26, all U.S. states had reopened their economies. Wall Street may be set to soar to new highs if the good news of the week outweighs the chaos that is happening in Hong Kong as well as the ongoing U.S. tensions with China.

Featured image courtesy of Hans Braxmeier/Pixabay

Micky is a news site and does not provide trading, investing, or other financial advice. By using this website, you affirm that you have read and agree to abide by our Terms and Conditions.
Micky readers - you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.