US Stocks Close Highly Positive for November
The positive developments on the vaccine front in recent weeks meant that US Stocks witnessed their best month in decades. On Monday the Stock Market wrapped up a historic rally, read on to see what unfolded in the markets.
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- Positivity infuses the US stock market
- Hopes for coronavirus vaccines impact November favorably
On Monday the stock market wrapped up a historic rally that saw global equities enjoy the strong buying momentum spurred by coronavirus vaccine developments. Even though the US markets closed in the red today, the month of November is now one of the strongest on record. On Monday, the Dow Jones Industrial Average closed lower by 271 points or -0.91%. The blue-chip S&P 500 index closed 16 points lower, or -0.46% and the tech-heavy Nasdaq Composite was relatively unchanged, closing lower by 7 points, or -0.06%.
The market was heavily tilted to riskier assets in November, led by the rising expectations that treatments for the coronavirus will be made available in early 2021 or even December 2020. In November, the market cheered the discovery of three, separate Covid-19 vaccine candidates that released strong efficacy rates of over 90% each. The news breakout prompted a rally in global equities with a focus on cyclical and stocks left behind by the pandemic.
A Positive Month for Stocks
The positive vaccine news over the past few weeks made November one of the best months for stocks in decades. However, it also featured a global rise in coronavirus cases which was a reason for concern for the Chair of the Federal Reserve. Chairman Jay Powell will have a chance to voice his concerns as he is due to speak to the US Senate on Tuesday. Treasury Secretary Steven Mnuchin will also testify before the Senate alongside Jay Powell. On Wednesday, they will testify before the US House. Both will address the future of the US economy as the country enters into a difficult stage of the pandemic.
Eyes Now on Fed Chair and Treasury Secretary
Fed Chair Jay Powell released a testimony on Monday in which he expressed his concerns over the economy. According to his statement, given what we’re seeing with coronavirus in the US and around the world, the economic outlook remains uncertain as we head into challenging months. He also noted that the recent upbeat news on vaccine progress was encouraging but only over the medium-term and there was still considerable uncertainty over the distribution of the vaccine. The general tone of his testimony is that the Fed is taking a cautious approach to the economic outlook. As to the statement released by Treasury Secretary Steven Mnuchin, as he is now a representative of the outgoing Trump administration, he issued fairly short opening remarks in which he thanked lawmakers for their help in passing the original fiscal stimulus and he urged Congress to pass a new more targeted relief package using funds that have been earmarked for Fed emergency lending facilities which he has asked the central bank to return after unwinding those facilities at the end of the year.
The hearing will be the last one for the duo. Jay Powell and Steven Mnuchin collaborated effectively over the years despite occasional tensions and President Trump’s attacks on Chair Powell over the years. The Fed chair and the Treasury Secretary were able to get the relief package through and they generally demonstrate a positive rapport. The market will be expecting to hear the duo’s prognosis for further stimulus as this is crucial in the current scenario.
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