Global Stocks Rally to Kickstart the Week, Nasdaq at Record

24 Aug 2021 · 3rd Party Analysis

Global Stocks Rally to Kickstart the Week, Nasdaq at Record


In Summary

  • Major stock averages in the US and Europe surged on renewed optimism over economic growth
  • Nasdaq Composite jumped to a new all-time high propelled by gains in big tech

Global equity markets surged on Monday after investors’ optimism was ignited by the full approval for the Pfizer/BioNTech jab by US regulators. Stocks in Europe and on Wall Street pushed to higher grounds, reversing last week’s losses.

European indexes opened the day mostly higher and later gained further, underpinned by a recovery in commodity prices. The move to the upside came after European bourses endured their worst week in about six months.

Rallying prices in oil stocks, as well as commodities, lifted the pan-European Stoxx 600 by 3.08 points, or 0.66%, to a close 471.88. The oil and mining sectors were among the best performers on Monday, gaining 2.1%, and 1.5%, respectively.

All major European markets ended the day in the green led by France’s CAC40 which added 0.86% to finish at 6,683.10. Spain’s IBEX35 advanced 0.59% to a close of 8,968.10. Germany’s DAX and UK’s FTSE100 were higher by 0.30% each.

Economic data for Europe showed business activity remained strong in August. The IHS Markit flash composite purchasing managers’ index showed business growth expanded at its fastest pace in almost 15 years. The index reached 59.5, almost on par with its 15-year high of 60.2 in July. Any figure above the level of 50 indicates a majority of employers reported an expansion in their business activity on a monthly basis.

Anticipation for Federal Reserve Symposium

Oil and commodity prices rebounded from their last week’s lows. Brent crude, the international oil benchmark, rose more than 5% to levels near $69 per barrel. Metal prices also turned higher with gold adding 1.7%, or $30, to settle at $1,805 per troy ounce.

A weaker US dollar supported the rising prices of precious metals. The greenback declined broadly among a basket of currencies. The EUR/USD pair added half a percent to 1.1744, while the GBP/USD popped nearly 0.9% to 1.3722.

In the US, the S&P500 advanced 0.85% to a close of 4,479.53. Earlier in the day, the broad-based index briefly touched an all-time session high on the news that the Pfizer vaccine became the first Covid-19 vaccine to gain full approval by the US Food and Drug Administration (FDA). The vaccine had been initially allowed under emergency use authorization.

The Dow Jones Industrial Average climbed 0.61% to finish at 35,335.71. The 30-stock index was led higher by gains in the banking sector and other real-economy stocks that are positioned to benefit from the vaccination campaign across the states.

The Nasdaq Composite, meanwhile, pushed to a new record closing high. The tech-heavy index added 1.55% to finish at a fresh all-time high of 14,942.65. Major tech stocks helped lift the index. Shares of Amazon and Google parent Alphabet were higher by roughly 2% each. Tesla shares added almost 4%.

Bitcoin is trading fairly flat on Tuesday after breaking above the $50,000 threshold a day earlier. US futures today hover slightly in positive territory.

The big event for traders and investors this week would be the annual symposium hosted by the Federal Reserve at Jackson Hole, Wyoming. The conference, starting on Thursday, will include speeches by high-ranking officials. Chairman Jerome Powell will speak on the economy, prospects for growth, and, what most investors hope to hear, a timeline for tapering the extraordinary monetary support.

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