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DJIA : Recovery on track

(Thu, 13 Aug 2020). The Dow Jones rallied on Wednesday. U.S. CPI data helped keep stock market bulls confident that the economic recovery remains on track. U.S. economic data centered on a hotly anticipated inflation report today, and it did not disappoint.

The Dow Jones staged a comeback today after Tuesday’s late-session collapse. Tech bulls returned, helping Apple and Microsoft lead the U.S. stock market higher. U.S. CPI beat expectations, suggesting the global recovery remains on track. The Dow Jones rallied today after a late-session collapse wiped out the index’s gains on Tuesday. As of 3:03 pm ET, the Dow had jumped 299.65 points or 1.08% to 27,986.56. The S&P 500 and Nasdaq surged even higher, advancing 1.5% to 3,383.76 and 2.18% to 11,017.72.

 

Dow Jones Soars as CPI Signals Reflation in U.S. Economy

U.S. economic data centered on a hotly anticipated inflation report, and it did not disappoint. Headline core CPI jumped more than expected, rising 0.6% versus last month’s 0.2% reading. This move confirms the inflationary jump that was seen in Chinese data over the weekend, and it’s further evidence the global economic recovery is on track. While a modest spike in inflation is a positive for the stock market, a dramatic increase could have precisely the opposite effect. Equities are not priced for tighter monetary policy, and Federal Reserve intervention to quell price pressure would be a shock to Wall Street. Fortunately for Dow bulls, most economists still see deflation as the principal threat to the U.S. economy.

Economist James Knightley at ING believes unemployment headwinds and the overall drop in gross domestic product limit the upside potential in the CPI. He added that the most important economic sector – the service industry – is unlikely to see any inflation-stoking wage increases anytime soon.

 

Stock Market Offers No Reaction After Biden’s VP Pick

If Wall Street is unhappy with Joe Biden’s selection of Kamala Harris as his running mate, the discontent isn’t making its way into the stock market yet. While national polls have started to tighten, Biden is well-positioned in key battleground states. Analysts disagree about what impact his presidency could have on stocks.

 

Dow 30 Stocks: Tech Returns With a Vengeance

A choppy day in the Dow 30 saw the tech sector catapult the index higher. After a weak performance on Tuesday, heavyweights Apple and Microsoft roared back with substantial gains. AAPL stock rose 3.3% to headline the DJIA. MSFT ranked second with a 2.9% rebound. Boeing stock tumbled 2.3%, while American Express and JPMorgan Chase each slipped more than 1%. It was not all bad for the Dow Jones’ old guard, though. Safety plays Coca-Cola and Walmart both performed strongly with gains of roughly 1.4%. Pfizer stock traded firmly too, rising 1.8% on hopes it can still be the first to produce an effective coronavirus vaccine in the United States.

 

 


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