U.S. markets and stock ETFs surged to new highs Wednesday as investors looked to the Federal Reserve for further support and to a potentially contained coronavirus epidemic.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 0.9%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) increased 0.7% and SPDR S&P 500 ETF (NYSEArca: SPY) rose 0.5%.
China updated its lowest number of new coronavirus cases in two weeks, supporting the senior medical adviser’s projections that the outbreak in the country will end by April, Reuters reports.
“There’s optimism that coronavirus cases have started to slowdown,” Gene Goldman, chief investment officer at Cetera Investment Management, told Reuters, but added that “markets have not really factored in the effects of coronavirus on the Chinese economy.”
The markets may have also found strength on renewed bets that President Donald Trump will clinch the upcoming election as Senator Bernie Sanders leads the race in the Democratic nomination for the 2020 presidential election, following his narrow win in New Hampshire.
“The consensus is that if Sanders is the Democratic nominee, President Trump, in a one-to-one battle, could beat him easily in November elections,” Goldman added.
Investors were also waiting on Federal Reserve Chairman Jerome Powell’s second day of testimonies before Congress, the Wall Street Journal reports. Powell previously stated the U.S. central bank is monitoring disruption from the coronavirus in China and calculating potential negative effects on the U.S. economy. However, he added that it was too early to tell if the outbreak would change their view on the current interest rate levels.
“The coronavirus is still the main narrative,” James Athey, a senior investment manager at Aberdeen Standard Investments, told the WSJ. “The market is finding a way to consistently see the positive in everything in the absence of bad news.”
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