Large tech stocks rebounded, NASDAQ rose 2.1percent, Tesla up 13percent

category:Finance
 Large tech stocks rebounded, NASDAQ rose 2.1percent, Tesla up 13percent


US stocks rose sharply on Wednesday, with the S & P 500 index up 1.4% from its all-time high set in February, its biggest one-day gain since July 6, closing at 3380.35. Ten of the 11 industry sectors in the S & P 500 rose, led by technology, healthcare and Consumer Discretionary stocks. Some analysts pointed out that the current trend of the market is relatively stable, and it is only a matter of time before the S & P 500 index breaks the record high.

The Dow Jones industrial average rose 289.93 points, or 1.1%, to 27976.84.

The rise of technology stocks such as apple, Microsoft and Tesla made the Nasdaq composite index outperform the market again. The Nasdaq composite index rose 2.1% to 11012.24 points. Stocks of major technology companies recovered some of their losses from the big drop in the previous trading day. Tesla rose 13% and the stock price returned to $1500. Facebook, Amazon and Netflix all rose more than 1.5%, while Googles parent company alphabet rose 1.8%, while Microsoft and apple rose 2.8% respectively.

Bank stocks were mixed, with JPMorgan down 0.85%, Goldman Sachs up 0.48%, Citigroup down 0.74%, Morgan Stanley up 1.16%, Bank of America down 0.74%, Wells Fargo down 0.51%.

Most of the stocks rose, with Alibaba up 2.79%, Jingdong up 2.81%, baidu up 1.21%, microblog up 1.77%, pinduoduo up 3.25%, Weilai auto up 2.81%, Tencent music down 1.74%, iqiyi up 0.5%.

U.S. airlines and cruise stocks fell, carnival cruise line fell nearly 4%, Norwegian Cruise Line, Royal Caribbean cruise line fell more than 2%. Boeing fell more than 2%, Delta Airlines, American Airlines, United Airlines fell more than 1%.

In terms of corporate financial report, LYFTs revenue in the second quarter was 340 million US dollars, a sharp drop of 61%. In the same period of last year, it was $867 million, but higher than the markets expected $319 million. The adjusted net loss was $265.8 million, and the market expected a loss of $301 million. LYFT shares fell nearly 1% after hours.

Cisco announced its fourth quarter revenue of $12.2 billion, slightly higher than the expected $12.08 billion; earnings per share of $0.80, also higher than the expected $0.74; but the performance guidance is not as expected, the first quarter adjusted earnings per share is expected to be 0.69-0.71 US dollars, the market is expected to be 0.76 US dollars; the first quarter revenue is expected to decline 9% - 11%, the market is expected to decline 7.15%. Cisco shares plummeted after hours, down more than 6%.

Technology stocks again, cyclical stock rebound is a flash in the pan?

Novel coronavirus pneumonia has been a major driver of the stock markets rise in the past few weeks, and the market is confident that the new crown vaccine will be developed in the future and the US governments financial support policy. After several consecutive days of correction, the NASDAQ ushered in a rebound. Today, technology stocks performed well, but investors are still divided on the future trend of technology stocks, especially on the possibility of plate rotation.

You SEF Abbasi, a market strategist at stonex, said: will the current lead in large technology stocks continue? Can expectations surrounding vaccine development continue to drive the stock market higher? There have been heated discussions among investors about these issues, and there seems to be no conclusion in the short term. While the market is constantly questioning the possible existence of bubbles in technology stocks, investors are concerned about the relatively neglected financial sector in recent years, and at the same time, they can take advantage of the appropriate leverage to get good returns from the financial sector, especially when the economy will maintain a recovery trend.

Morgan general points out that the valuation gap between cyclical industry stocks and technology stocks has reached an all-time high, and their recent rebound is more like a tactical rebound.. The continued rebound of cyclical stocks needs to be supported by a more steep yield curve. However, as the Feds loose monetary policy suppresses yields and the long-term inflation expectation is relatively low, it may be a misleading signal about plate rotation. The recent performance of cyclical stocks is good, but technology stocks with both attack and defense are more optimistic, and the next market trend may still be dominated by technology stocks.

CPI of the United States in July significantly exceeded expectations, and inflation showed signs of recovery

The CPI data of the United States in July, released before the end of Wednesday, exceeded expectations. The annual rate of CPI in July was actually 1.0%, expected to be 0.7%, and the previous value was 0.6%; the annual rate of core CPI in July was actually 1.60%, expected to be 1.1%, and the previous value was 1.2%. This also implies that there are signs of a rebound in US inflation, and the Fed will become more cautious in formulating policies in the future. As the Federal Reserve and the U.S. government take massive stimulus measures to inject liquidity into the market, the surge in the US money supply and the speed of the recovery in inflation are also surprising. Analysts at Morgan Stanley say the money supply is growing very fast. As of July, the M2 money supply in the United States has increased from US $15.33 trillion at the end of last year to US $18.3 trillion, with an annual growth rate of more than 20%. It has never been more than 15% since records began. However, in the short term, more M2 money supply does not mean higher inflation. The next action of the Federal Reserve will become very critical. If the Fed chooses to adopt a more relaxed attitude in the next two years, the inflation rate may rise significantly, even higher than the 2% target.

The CPI data of the United States in July, released before the end of Wednesday, exceeded expectations. The annual rate of CPI in July was actually 1.0%, expected to be 0.7%, and the previous value was 0.6%; the annual rate of core CPI in July was actually 1.60%, expected to be 1.1%, and the previous value was 1.2%. This also implies that there are signs of a rebound in US inflation, and the Fed will become more cautious in formulating policies in the future.

As the Federal Reserve and the U.S. government take massive stimulus measures to inject liquidity into the market, the surge in the US money supply and the speed of the recovery in inflation are also surprising. Analysts at Morgan Stanley say the money supply is growing very fast. As of July, the M2 money supply in the United States has increased from US $15.33 trillion at the end of last year to US $18.3 trillion, with an annual growth rate of more than 20%. It has never been more than 15% since records began. However, in the short term, more M2 money supply does not mean higher inflation. The next action of the Federal Reserve will become very critical. If the Fed chooses to adopt a more relaxed attitude in the next two years, the inflation rate may rise significantly, even higher than the 2% target.