Jakarta, CNBC Indonesia – The stock exchange of the United States (US) opened higher in trading Wednesday (24/3/2021), as investors again bet that the economy will recover thanks to vaccinations.
The Dow Jones Industrial Average shot up 284.7 points (+ 0.88%) at 8:30 a.m. local time (9:30 p.m. EST) and 15 minutes later to 317.3 points (+ 0.98%) to 32,740.41 . The S&P 500 rose 20.3 points (+ 0.52%) to 3,930.85. However, the Nasdaq weakened 30.6 points (-0.23%) to 13,197.09.
Intel shares rose 1% after the company announced plans to open two new factories. The first factory to produce chip sets for their needs, another factory supplies a third party.
The Dow Jones plunged more than 300 points on Tuesday, dragged down by a 3% fall in Caterpillar shares, amid fears of rising coronavirus cases in the US and Europe. The S&P 500 fell 0.8% on the back of airline shares, while Russell 2000 dropped 3.58%.
But at the opening today, airline and shipping stocks rebounded with United Airlines and American Airlines jumping more than 3%. Energy stocks also turned higher (rebound) following the rise in world oil prices.
Fundstrat Global Advisors analyst Tom Lee believes that yesterday’s correction was only an act of balancing the composition of assets and taking profit. He still thinks that cyclical stocks will be the goal of accumulation in the medium term.
Several countries have reported a return of Covid-19 cases and have even found a new variant that is more contagious, the World Health Organization (WHO) reported.
A third wave of Covid-19 cases reportedly emerged in Germany and France, which resulted in continued restrictions on community activities. However, the vaccination rate in the US continues to increase with 1 in 5 adults there having received a vaccine injection.
On Wednesday, Federal Reserve (The Fed) Chair Jerome Powell and Treasury Secretary Janet Yellen were again in front of the US House of Representatives Financial Services Committee. At the same forum yesterday, they admitted that assets in the market were already expensive but there were no concerns about financial stability.
“While asset valuations are boosted by historical metrics, there is confidence that vaccinations are moving quickly so the economy will get back on track,” Yellen said. “I think when in an environment where asset prices are high, it is important for regulators to ensure that the financial sector is resilient and ensure that markets are doing well.”
However, he considered the sectors hardest hit by the pandemic “still weak” and the unemployment rate “still not showing the condition of the fall,” so the economic recovery will take time. Yield (yield) US government bonds also weakened slightly.
CNBC INDONESIA RESEARCH TEAM
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