Dow Jones Industrial Average (INDEXDJX: .DJI) explodes. Why? – Idaho Reporter

INDEXDJX: .DJI

Dow Jones Industrial Average (INDEXDJX: .DJI) explodes. Why?

Dow Jones Industrial Average (INDEXDJX: DJI) went up on Monday and closed at 24,597.37 which is 911points more than Friday. The man behind this Monday rally is Fed chairman, Mr. Powell.

The chairman of the Federal Reserve says the US economy could “easily” contract by 20-30% amid the pandemic.Jerome Powell added in a CBS interview that the economic downturn might last until late 2021, and a full rebound may not be happen until a vaccine is found.However, he expressed confidence the economy would recover, and said he would never bet against the US economy.

BBC

If there is no second wave of pandemics, he expects the economy to recover in the second half of the year. That is exactly what the stock market wants to hear.

But there were also critical voices about the sudden cheer. “The recovery Powell describes is anything but a V,” said Thomas Altmann, portfolio manager at QC Partners. So far, the stock exchanges have priced in a rapid recovery. “In the case of a long U, I currently think the prices are too high.”

“The carelessness of investors is noticeably increasing again. Economic fears and political risks are taking a back seat,” commented analyst Timo Emden. According to analyst Christian Schmidt from Helaba, “in the coming weeks it can be assumed that the fight between the bulls and bears will continue”. The development of the gold price also shows that investors still need security.

There was also a tailwind from the oil market, where things were also going uphill today. Concerns about an oversupply that had long depressed prices are now taking a back seat. The “official” cut in production decided by Opec + is currently coming up with a further shortage of supply after numerous US shale oil companies have recently had to close their wells because they were no longer profitable.

However, experts are also keeping an eye on the smoldering trade dispute between the USA and China, which always has what it takes to recapture the good momentum in the market. Not only did oil prices rise; oil stocks were also in demand, such as the two heavyweights ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) contained in the Dow Jones Industrial Average Index.

The mood on the U.S. housing market has recovered more strongly than expected after the historic decline in May last month. The NAHB housing market index rose seven points from the previous month to 37 points. In April, the Corona crisis caused the index to drop to its lowest level in seven years.

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