U.S. stock market closed with strong growth

Trading on Monday, US stock indices ended with strong growth amid a general increase in risk appetite in financial markets thanks to signals that the United States may lift some of the trade restrictions for China imposed by the administration of the previous US President Donald Trump.

The Dow Jones Industrial Average index rose 618.34 points (1.98%) to 31880.24 points. The Standard & Poor’s 500 rose 72.39 points (1.86%) to 3,973.75 points. The Nasdaq Composite rose 180.66 points (1.59%) to 11535.27 points.

JPMorgan shares rose 6.2% yesterday. The largest U.S. bank by assets raised its forecast for net interest income (NII) for 2022 to $56 billion from a previously expected $53 billion. In a presentation released by the bank on Monday, it said JPMorgan hopes to achieve its 17% return on tangible equity target as early as this year.

JPMorgan Chief Financial Officer Jeremy Barnum said at an investor event that the bank’s loan losses are likely to remain extremely low this year as Americans have yet to deplete cash reserves built up during the pandemic.

Meanwhile, the bank’s CEO James Dimon, who also spoke at the event, said the U.S. economy remains strong and potential headwinds to growth are not insurmountable.

The financial companies sub-index in the S&P 500 rose 3.2% at the end of trading, showing the best performance among the index’s 11 sectoral indicators.

The value of shares of Citigroup Inc. increased by 6.1%, Goldman Sachs Group Inc. – by 3.2%, Bank of America Corp. – by 5.9%.

VMWare Inc., a developer of cloud infrastructure technology, ended trading up 25%. According to The Wall Street Journal, citing informed sources, Broadcom Inc. is ready to buy the company for $60 billion. The parties are negotiating and may announce the deal on Thursday, the sources said.

Broadcom’s share price fell 3.1 percent.

U.S. President Joe Biden said the issue of duties on imports of Chinese goods to the U.S. is under consideration and he intends to discuss it with the country’s Treasury Secretary Janet Yellen after his return from an Asian tour, Bloomberg reported. These words of Biden were interpreted by investors as a signal of possible lifting of some duties.

The market on Monday was also supported by the statements of representatives of JPMorgan Chase & Co., which increased the optimism of traders about the prospects of the U.S. economy.

In recent weeks, U.S. stock indices have declined significantly on expectations of rapid tightening of monetary policy by the Federal Reserve System (FRS), as well as concerns that high inflation will affect corporate profits. Last Friday, the S&P 500 came close to ending the session in a bearish trend zone, meaning it was 20% below its January peak, but was able to bounce back up toward the end of the session.

“The market has been poised for a rebound for some time,” said Kingsview Investment Management portfolio manager Paul Nolte, as quoted by Dow Jones. – That doesn’t mean its downward trend since the beginning of this year is over. It’s a respite after the active selloff in stocks over the past two months.”

 


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