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May 26, 2020
‘Rally of hope’: Why the S&P soared back past 3,000
May 27, 2020(Reuters) – U.S. stocks rose above the 3,000 level for the first time since March 5 on Tuesday, continuing a rally that has pushed the benchmark index up nearly 35% from its March 23 closing low on hopes for a potential coronavirus vaccine and the reopening of businesses across the country.
MARKET REACTION:
* STOCKS: Dow up 2.48%, S&P 500 up 1.90%, Nasdaq up 1.39%
* BONDS: Benchmark 10-year notes US10YT=RR last fell 13/32 in price to yield 0.6998%, from 0.659% late on Friday.
* FOREX: The dollar index =USD fell 0.649%, with the euro EUR= up 0.69% to $1.0974.
GEORGE GERO, MANAGING DIRECTOR, RBC WEALTH MANAGEMENT:
“People seem to be skeptical of the length and the timing of the rally.”
“Yet you have all this money coming in globally because the U.S. is still the most liquid and safest economy to put money into, especially when so many countries have lower interest rates.”
“I think we’re going to give back a little bit soon as more political headlines emerge and people start thinking about problems with China, problems in Europe, problems everywhere the investor looks.”
PETER CARDILLO, CHIEF MARKET ECONOMIST AT SPARTAN CAPITAL SECURITIES IN NEW YORK
“It’s a rally of hope and there are several things driving it. Economies are reopening around the world and here in the states. And we have several biotech companies beginning first trials of vaccines. If things go well we could have a vaccine by the first of the year.”
“Also, as a symbolic driver, the New York Stock Exchange is reopening, at least on a partial basis. It never stopped trading but it’s symbolic. It means we’re opening up for business.”
“If consumer confidence holds steady that means confidence hasn’t eroded and that will also be good for the market.”
