Dusseldorf For the second day in a row, the US stock market started the day with strong gains. In the course of trading, the most important indices limit their profits somewhat. The Dow Jones was up 2.5 percent to 23,259 points. The broader S&P 500 advanced around two percent to 2716 points, the technology-heavy Nasdaq Composite gained 1.4 percent to 8023 points.
If the S&P 500 holds its gains, it could enter a bull market at the close of trading. This is achieved when prices have risen again by 20 percent after a low.
The financial service provider American Express was again one of the big winners on Tuesday. Already yesterday, the paper registered an increase of more than ten percent and now reached a significant price increase again with 6.8 percent.
On Monday, Wall Street had a brilliant start to the week. The most important stock indices soared by up to almost eight percent. In terms of points, the Dow Jones posted the third-largest daily profit of all time and again reached the level of mid-March.
The positive development in Asia obviously gave rise to optimism on Tuesday: in South Korea there were fewer than 50 new corona cases for the second day in a row. There were no new deaths in China for the first time on Monday. Both countries were among the first in which infection rates peaked. From the current development, investors hope to draw conclusions about the course of the epidemic in the USA.
However, JP Morgan strategists doubt that the US stock markets have already reached their final low. They point out that the S&P 500 has taken an average of 18 months to find its bottom in a recession.
Before investors buy stocks again sustainably, one should first wait to see if there is no second wave of infection in China and the western countries if the current restrictions are lifted. In addition, further government stimulus packages are needed.
A buy signal would be, however, according to the experts from JP Morgan, if stocks in the S&P 500 were only valued at ten times the current profit. Currently this value is still at 15. Until then, the analysts recommend a defensive orientation and take profits in short-term market recoveries.
Goldman Sachs analyst Steve Kostin has already calculated how the pandemic will affect the share buyback programs and dividends of US corporations. He expects the companies listed in the S&P 500 to cut their share buybacks by up to 50 percent by the end of the year to $ 371 billion. The dividends would drop by 25 percent.
The titles of shale oil producers such as Marathon, Occidental or Apache were also in demand, which increased in price by up to twelve percent. According to stock marketers, they benefited from the hope of a significant reduction in the throttling by the exporting countries organized in “Opec +”.
According to experts, shale oil producers only work profitably from an oil price of around $ 50 per barrel because of the complex fracking process. The US variety WTI initially became more expensive on Tuesday, but then cost $ 25.15, 3.6 percent less than on Monday.
With agency material.
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