Let’s explore the reason for rise in Dow Jones Indices.
- New home sales in U.S. jumped 17% in May from April suggest that buyers have rushed to buy homes.
- In U.S. IHS Markit’s Index of purchasing managers shows a reading of 46.8 in June compared to 37 in May. Suggest economical recovery underway.
- Investors sentiments have turned positive in U.S. on the back of re-opening of business activities.
- Many analysts expects a V-shape economical recovery in U.S. resulting in surging Wall Street.
- Investors are hopeful that Trump administration will come out with $ 1 trillion package this summer to bring economy on track.
- Stocks in Wall street ends in green territory in which Dow gained 131.14 points, S&P closed positively with 13.43 points and Nasdaq also ends with an uptick of 74.89 points.
- Asian markets are trading with negative biased this morning on the back of surging cases (8:30 a.m.)
- SGX Nifty is in negative note this morning. (8:30 a.m.)
Why Dow rises on Tuesday amid surging corona virus cases?
- New home sales in U.S. jumped 17% in May from April suggest that buyers have rushed to buy homes. This suggest that economical recovery on track and this is the reason for surging U.S. market.
- In U.S. IHS Markit’s Index of purchasing managers shows a reading of 46.8 in June compared to 37 in May. Suggest economical recovery underway and leaving behind the impact of corona virus pandemic.
- Stocks surged on the back of a hope that there will be V-shape recovery in U.S. economy. Since all states in U.S. have eased out the lock down restrictions and economical activities are rolling now. This is the prime reason for the surge in U.S. Stocks.
- There is another hope that Trump administration will soon announce a package of $1 trillion to bring the economy back from the ill affect due to pandemic.
- Investors have ignored a sudden spike in corona cases around the world and with in United States. On Sunday, there is a highest single day jump in cases that stood 183000 around the world.
- Today all states in U.S. are fighting with surged corona cases with worst hit States are California, Florida, South Carolina, Missouri, Nevada, Montana, Utah and Arizona.
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- SGX Nifty is suggesting a positive start with a rise of 0.03% at present time (8:30 a.m.). Indian Markets will start at around 10500 level. Asian markets are trading with mix this morning.
- The structure of the market is positive and that is the reason to follow “Buy & Dip strategy”. Incase Nifty has a fall at around 10400-10450 zone than you can go long on first sign of recovery with a stoploss at 10150 and target 10600 point.
Read the article on “Stocks for long term portfolio”