Stock market: Wall Street welcomes a decision by Washington

Dow futures rise as Senate Republicans make progress toward fresh coronavirus aid package
July 23, 2020
Dow drops 100 points as coronavirus relief debate continues, McDonald’s and 3M fall after earnings
July 28, 2020

Stock market: Wall Street welcomes a decision by Washington

MARKET REVIEW. The New York Stock Exchange finished in the green on Wednesday in a market welcoming the US government’s decision to invest in a coronavirus vaccine project and awaiting the adoption of new measures to support the economy.

The clues

In Toronto, the S & P / TSX gained 8 points, or 0.05%, to 16,171 points.

The S&P 500 Composite Index gained 18 points, or 0.57%, to 3,276 points.

The Dow Jones, Wall Street’s flagship index, rose 165 points, or 0.62%, to 27,005 points.

The Nasdaq, with strong technological coloring, rose 25 points, or 0.24%, to 10,706 points.

The Canadian dollar appreciated 0.38% to US $ 0.7454.

Oil was down US $ 0.04, or 0.10%, to US $ 41.88.

Gold jumped US $ 23.40, or 1.27%, to US $ 1,867.30.

The context

Investors have welcomed an announcement by BioNtech (+ 13.72%) and Pfizer (+ 5.10%) that the US government will pay $ 1.95 billion to obtain 100 million doses of a potential vaccine against the new coronavirus, developed by this German-American alliance.

The hope that an effective vaccine will be developed sooner than expected is behind the stock market rally,” notes Peter Cardillo of Spartan Capital Securities.

“But the market is disconnected from reality by anticipating that this vaccine will be available in the near future”, moderates Mr. Cardillo. Market players also hoped Congress would soon vote on a new budget aid package to support the US economy in the face of the impact of the coronavirus. According to CNBC, Republicans are considering extending until December a measure providing for exceptional additional assistance for the unemployed, which expires at the end of the month. The amount of payments would drop to $ 400 per month. The New York place stalled early in the session, reacting to the new diplomatic escalation between Washington and Beijing. The United States in fact ordered China Wednesday to close its consulate in Houston without giving many details on its motives. Beijing threatened Washington with “retaliation.” The announcement of this decision comes against a backdrop of heightened tensions between the two powers on several fronts: controversial law on national security in Hong Kong, accusations of espionage, human rights situation in Xinjiang (north-west) in particular. . Among the indicators, resales of old homes in the United States started to rise again in June, climbing 20.7% from May, after suffering from containment measures, according to data from the National Federation of Agents. US real estate (NAR) released Wednesday. On the bond market, the 10-year rate on US debt fell to 0.5971% around 4:20 p.m., against 0.6004% on Tuesday evening.