Retail sales push U.S. stocks higher, India-China relations deteriorate after face-off

Key highlights that push U.S. stocks higher.

  • U.S. Retail sales surged 17.7% in May from previous month, better than expected number of 8% polled by economists.
  • Trump administration is planning to announce an infrastructure package of $ 1 trillion to push the economy.
  • Fed announced to purchase corporate bonds to support the economical activities in the country.
  • All U.S. indices closed with healthy gains.
  • India- China relationship takes a back seat after fresh clashes in Army of two sides at  Galwan Valley. This resulted in casualties on both side.
  • This step will further boost liquidity in the system and will spur growth.
  • Schools have been closed in Beijing after 75 people found positive for corona virus in last few days.
  • Asian markets are trading with negative biased this morning.
  • SGX Nifty is in negative note this morning.

U.S. stocks

Why U.S. Stocks recovered with a healthy gains?

  • Retail sales revival has really surprised economist with better than expected rise of 17.7% from prior month. Economist expected a revival of 8%. This has resulted in improving the investors sentiments that led to rise of all the three indices with healthy gains.
  • The positive sentiments increased further on news that Trump administration is planning to come out with a package of $ 1 trillion to support the economical growth.
  • Fed decision to buy corporate bond led to sharp recovery of U.S. indices. This will further fuel the liquidity into the system and will spur the growth. This is another reason for the rise of these indices.
  • Indices have ignored a negative news of closure of some parts in Beijing after 75 people tested positive from corona virus infection. Also Schools will remain closed on the back of rising cases. A sudden spike in covid 19 cases can be seen all around the world threatening second wave of infection. This is a real concern for the stocks markets in near future and all the indices are showing fatigue to resume uptrend.
  • Some U.S. states like Texas, California, Florida and other states have seen sudden spike of corona virus cases. This can be seen by sudden spike in hospitalization rates.
  • Thursday already we have seen worst performance of equities indices all around the world. All major indices had fallen sharply lower on the back of this reason. In case things get worst than further correction can’t be ruled out.
  • India-China relationship deteriorates on the back of China claim of land in Indian territory. A recent clash between armies resulted into heavy casualty on both side. A key risk for Indian equities in near future if the relationship deteriorates further.

US Markets

  • Dow Jones Industrial Average increased by 526.82 points, or 2.04%, close at 26,289.98.
  • The S&P 500 gained by 58.15 points, or 1.93%, ends at 3,124.74.
  • Nasdaq Composite Index surged by 169.84 points, or 1.75%, close at 9,895.87.

Asian Markets This Morning

IndicesCurrent ValuePrev. Close% Change
Nikkei 22522,390.6622582.21-0.85%
Straits Times2,649.532666.85-0.65%
Hang Seng  24,287.2824344.09-0.23%
Taiwan Weighted11,520.2611511.64 0.07%
Shanghai Composite2,932.672,932.67 0.03%
SGX Nifty9,869.509905.00-0.36%
Time of data collection: 7:18 A.M

Nifty Outlook

  • SGX Nifty is suggesting a negative start with fall of 0.36% at present time (7.18 a.m.). Indian Markets will start at around 9900 level. Asian markets are trading weak this morning and pushing pressure on SGX Nifty.
  • Today traders should be cautious on the back of opposite news. On one side, U.S. stocks surged and on other side, India China relationship deteriorates. This can put pressure on the markets today. We are more bearish than positive for the day. nifty outlook is positive for the day. Have a look on You tube video to understand technical charts:

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