Wall Street has risen steadily on Friday – the Dow Jones has rebounded from 2020 loss

The Dow Jones index, which shows the value of the shares of several large US-listed companies, rebounded on Friday from the loss caused by the corona epidemic.

The last time the index was at its current level was when it set a record in February, just before the pandemic broke out in earnest and paralyzed parts of society.

The index is the latest of the key indices to overcome this year’s losses.

The S&P 500 is also doing particularly well: the index that reflects the market value of the 500 largest companies in the US is experiencing the most growth since August 1986, reports CNBC.

At cut-off time in the US, the layout looked like this:

• The Dow Jones climbs 0.6 percent to 28,492.27 points
• S&P 500 rises 0.7 percent to 3,484.55 points
• Nasdaq Composite rises 0.6 percent to 11,625.34 points

Believe in continuous growth

Erik Bruce and Joachim Bernhardsen at Nordea write that the week is marked by good news in the stock market.

– Unsurprisingly, the Fed has publicly said that they govern according to average inflation. This means stimulating monetary policy for a long time so that after many years of below-target inflation, we can have a few years of above-target inflation, the two write.

Bruce and Bernhardsen point out that, along with cost cuts at companies, it will help profits go up.

– Same thing with the “promise” of low interest rates, they think it’s good news for the stock market.

Nordea’s economists point out that one thing in particular will be decisive in the future, namely, the evolution of company profits.

They point out that the market has a high price according to objectives such as price / earnings (P / E), that is, the relationship between the market value, the share price and the profit.

– Therefore, you may be vulnerable to weaker income. However, we believe the second-quarter trend, with stronger-than-expected earnings growth, may continue, Bruce and Bernhardsen write.

They corroborate this by saying that the market underestimates the cost cuts made during the crisis and that therefore they will provide a higher than expected profit margin when sales volume fluctuates again.

– However, it should not be assumed that a lot of positivity has already been priced in the market. The rise in stocks will likely be much more cautious than the one behind us, they write.

No wonder the Dow Jones is fine

On Monday of last week, it was announced that there will be some changes in which companies will be included in the Dow Jones index. Then it became clear that ExxonMobil, one of the world’s largest companies, would soon be scrapped in favor of the technology company salesforce.com.

ExxonMobil stock rose 2.72 percent on Friday.

The change came after Apple split its shares and wanted to keep the balance in technology stocks.

On Friday, however, it appears that non-tech companies are pulling the index as well: Coca-Cola, Nike and Walmart were up between one and three percent.

A Charles Schwab analyst tells CNBC it was “almost inevitable” that the Dow Jones would whisper this year’s losses.

– Nasdaq has been positive for a long time and S&P is up more than eight percent this year, the analyst notes. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.