US stock indices rose on Friday amid news of strong economic recovery in 2021 and widespread gains in technology and healthcare stocks. As a result, the tech-heavy NASDAQ Composite reached a new record high, while the S&P 500 hit its yearly high.
In particular, the S&P 500 rose by 0.24%, amounting to 3638.35 points, while the Nasdaq Composite grew by 0.92% and closed at 12205.85 points. The Dow Jones Industrial Average, meanwhile, jumped 0.13% and stopped at 29910.37 points. At a certain moment of trading, the DJIA again broke through its peak of 30,000 points.
Overall, major stock indices have risen more than 10% since the beginning of November. The 13% increase in DJIA was a record since January 1987, while the recent growth of NASDAQ and S&P 500 was the fastest pace since April this year.
In another note, many market participants are still hoping for an effective COVID-19 vaccine and its positive impact on the recovery of the global economy.
Just recently, biotechnology companies AstraZeneca, Moderna, Pfizer and BioNTech announced successful trials of their COVID-19 vaccines. The drugs from Pfizer and BioNTech demonstrated an efficiency of 95% during tests, while the drug from Moderna reported a 94.5% effectiveness.
Meanwhile, AstraZeneca is preparing to conduct another test in order to clarify the effectiveness of its drug. Previously, the results of the interim trials of its COVID-19 vaccine showed an average efficiency in the region of 70%, and one of the dosage options was 90%. Later, scientists reported that the high result was noted in younger participants, and many of the subjects received only a fraction of the required dose due to an error. Such contradictory information has caused caution among experts and investors.
The recent news that incumbent US President, Donald Trump, said he will recognize Joe Biden's victory in the presidential election if the electoral college votes for the Democratic candidate also added optimism to investor sentiment.
However, to date, Trump continues to complain about numerous frauds during the elections, but the Republican has yet to provide evidence to his words. The members of the electoral college will meet on December 14 to finalize the voting results.
Going back to trading last Friday, stocks of many companies also increased in price amid expectations of strong sales on Black Friday.
For example, stocks of Etsy Inc increased by 10.7%, shares of GameStop Corp. gained 9%, Amazon.com Inc and Shopify Inc gained 0.3% and 1.5%, respectively, while Gap Inc and Walmart Inc saw an increase of about 0.9% and 0.2%, respectively.
Stocks of Tiffany & Co also rose by 0.1%. Representatives of the company announced that on December 30, they will hold a meeting regarding the adoption of new terms on the deal with Louis Vuitton.
IQIYI Inc, on the other hand, recorded a drop by 2.7%, after news that Alibaba Group and Tencent Holdings have paused their negotiations on buying a share on the video service.
Meanwhile, stocks of Tesla Inc jumped 2.1%, even though on Friday, China's SAMR said the company was recalling 870 Model X vehicles in the country due to the threat of a part of the roof ripping off. The day before, the company recalled more than 9,000 Model X cars due to a similar problem.
As for major stock indices in the Asia-Pacific region, most closed in positive territory amid good statistics from China.
The Shanghai Composite increased by 1.1% and closed at 3408.31 points, while the Shenzhen Composite grew by 0.3%, amounting to 2253.12 points.
The Hong Kong Hang Seng Index jumped by 0.3%, amounting to 26894.68 points, while the South Korean KOSPI rose by 0.29% and closed at 2633.45 points.
As for Australia's S & P / ASX 200, the index fell by 0.53%, amounting to 6601.1 points, while Japan's Nikkei 225 grew by 0.4% and closed at 26644.71 points.
The reason for such increases was the good statistics from China, according to which the profits of the country's industrial giants increased by 28.2% in October, after jumping by 10.1% a month earlier.
It raised expectations for a strong economic recovery next year. Therefore, China's real GDP is projected to grow by 8.2% in 2021.
Experts believe that the growth in these indicators are the results of improving optimism, especially since the demand for risky assets are also increasing amid promising news regarding COVID-19 vaccines and mitigating political risks.
This week, latest reports on the state of the US labor market will be published, and experts expect a drop in unemployment from 6.9% to 6.8%.