U.S. equity markets soared Monday after drugmaker Moderna announced progress toward a COVID-19 vaccine and as lockdowns continued to ease nationwide.

The Dow Jones Industrial Average gained as many as 1,023 points before paring its advance in the final hour of trading.

The S&P 500 registered its best day since early April, rising 3.15 percent, while the Nasdaq Composite climbed 2.44 percent.

Investors also reacted favorably to Federal Reserve Chairman Jerome Powell, who said the central bank will continue to support the U.S. economy for as long as necessary.

Powell also warned that while the U.S. economy will return to growth in 2020, it may not reach pre-crisis levels until late next year and that a full recovery may hinge on the discovery of a COVID-19 vaccine.

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“For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine,” Powell said on CBS’ “60 Minutes.”

He added the central bank is “not out of ammunition by a long shot” and that “there’s a lot more” that can be done to support the economy.

At least 14 U.S. states eased lockdown restrictions on Monday, including Florida, which allowed gyms and fitness centers to reopen at 50 percent capacity and restaurants and retailers to increase their volume to 50 percent. Massachusetts will begin opening businesses with a phased plan on May 18.

Looking at stocks, drugmaker Moderna received positive results from a Phase 1 clinical trial for its experimental COVID-19 vaccine.

Automakers Ford, General Motors and Fiat Chrysler reopened vehicle assembly plants on Monday at limited capacity. The industry employs about 1 million workers and makes up 6 percent of U.S. economic activity.

Apple will reopen 25 U.S. stores this week, 12 in Canada and 10 in Italy. Anyone entering the locations will be subject to temperature checks and be required to wear face coverings.

GrubHub has rejected Uber’s latest all-stock takeover offer of 1.9 Uber shares for each GrubHub share, saying the offer undervalued the company. Talks remain ongoing.

J.C. Penney filed for Chapter 11 bankruptcy protection following Friday’s closing bell. The retailer earlier on Friday announced it had made a $17 million interest payment as it weighed strategic alternatives.

West Texas Intermediate crude oil spiked 8.12 percent to $31.82 per barrel and gold slipped 1.23 percent to $1,732 an ounce.

U.S. Treasurys slipped, causing the yield on the 10-year note to climb to 0.741 percent.

European markets were higher across the board with Germany’s DAX up 5.67 percent, France’s CAC higher by 5.16 percent and Britain’s FTSE adding 4.29 percent.

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In Asia, Hong Kong’s Hang Seng gained 0.58 percent and China’s Shanghai Composite edged up 0.24 percent. Meanwhile, the Nikkei added 0.48 percent after government data showed the Japanese economy entered a recession in the first quarter.

Source: https://www.foxbusiness.com/markets/us-stocks-may-18-2020

The post Dow surges over 900 points amid coronavirus vaccine progress as lockdowns ease first appeared on Garner Ted Armstrong Evangelistic Association.

The Dow Jones Industrial Average crossed 28,332.74 on Monday, meaning it has rallied 10,000 points, or more than 54 percent, since Trump’s election victory on November 8, 2016. The benchmark S&P 500 has gained more than 46 percent.

“The rally has been driven by pro-growth measures, de-escalation of trade tensions, huge liquidity injections by central banks and a FOMO approach by investors worried about missing out on a remarkable U.S. market outperformance that has set one record high after the other.” Mohamed El-Arian, chief economic adviser at Allianz, told FOX Business.

The gains show why U.S. markets have become the envy of the world under Trump, who has followed through on his promises of cutting taxes and regulations and rewriting global trade deals in America’s favor.

By comparison, global exchanges such as Hong Kong’s Hang Seng and Britain’s FTSE have gained 20.4 percent and 6.4 percent, respectively, since Trump’s election win, while China’s Shanghai Composite has lost 7.2 percent, according to Dow Jones Market Data Group. Of the major global averages, only Japan’s Nikkei, up 44.1 percent, has come close to the gains of the U.S. markets.

U.S. investors’ holdings have benefited from Trump’s pro-business agenda. He has lowered income tax rates for individuals, cut corporate taxes and rolled back a number of regulations, including restrictions on the country’s biggest banks.

Trump also negotiated the United States-Mexico-Canada Agreement, which overhauls the Clinton-era North American Free Trade Agreement, commonly known as NAFTA, and has embarked on a nearly 21-month-long trade war against China, which he says has “been taking advantage” of the U.S. for years.

This week, Democrats in the House backed the USMCA after months of negotiation, and an initial trade deal with China was reached. Both deals are expected to provide a tailwind for a stock market, and an economy, that have been on fire in the past four months.

The Dow Jones index, for instance, has gained 11.2 percent since bottoming out on Aug. 14.

David Kostin, chief US equity strategist at Goldman Sachs, thinks the stock market’s recent success suggests “the pace of U.S. economic growth will improve in the near future.”

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His team points to Fed rate cuts along with the bottoming of the inventory cycle as reasons, in addition to the easing of trade tensions with China.

Morgan Stanley Equity Strategist Michael Wilson, who recently released his year-end 2020 S&P 500 outlook, has a base-case target of 3,000 – almost 5 percent below current levels.

He expects the US economy to “muddle through in 2020,” but is concerned that earnings growth will disappoint.

Bob Doll, chief economist at Nuveen Investments, partly agrees. He told FOX Business’s Maria Bartiromo that the recession fears from December 2018 and August are “dissipating,” leading to the stock market’s rally.

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However, Doll says the economy has to deliver, or it will be a sluggish year because “valuations are not cheap” and expectations for next year’s earnings are “a little on the high side.”

Source: https://www.foxbusiness.com/markets/dow-gains-10000th-point-since-trumps-election

The post Dow gains 10,000th point since Trump’s election first appeared on Garner Ted Armstrong Evangelistic Association.