US Markets Jumped on Fed Governor Comments ” Sustained large Scale asset purchases”
Let’s explore the reason for surging Stocks on US Markets.
Fed Governor Lael Brainard comments that Federal Reserve will provide sustainable bond purchasing program to support the economy during the pandemic.
This provided a hope of speedy recovery of US economy.
Biotech Moderna’s vaccine is showing positive results on 45 patients under early trial, a key positive development.
Slowly the world is again restricting economical activities to fight against corona cases, a risk for global equities.
Asian markets are trading with green biased this morning. (8:00 A.M)
SGX Nifty is in green note this morning. (8:00 A.M.)
Why US Markets are surging?
Stocks on Wall Street recovered some of their earlier losses on the back of news that Federal Reserve will provide unlimited support to the worst hit US economy during the pandemic hinted by Fed Governor Lael Brainard.
This means that further liquidity can fuel the fast economy recovery in US and lead to low unemployment.
Another good news is from Corona vaccine front by company Moderna. In its statement the company reported that the corona vaccine under trial is showing positive response on neutralizing the virus and a key positive development. The treatment is going on 45 patients and showing positive response in improving health of these patients. Any good news on this front will lift the stock markets.
Most of Asian markets are underperformers compared to developed markets like U.S. markets. This is one of the reason for rising Asian markets indices this morning. Basically this is a catch up rally and we believe this will continue in near future. Best trade is to remain a buyer and wait for any dip.
US markets are surging because of positive economical data, reopening economies and high liquidity due to lot of packages announced both by Governments & central banks.
Rising corona cases are the key risk for the present environment and markets can stall rise in case the cases keep on rising.