U.S. markets and stock ETFs pushed higher on choppy trading Wednesday as optimism over the economic recovery helped assuage concerns over rising coronavirus cases.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 0.7%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) gained 0.1%, and SPDR S&P 500 ETF (NYSEArca: SPY) rose 0.2%.
“People are debating whether or not the low in the economy has actually been reached so they’re sticking with growth stocks and that’s technology,” Robert Pavlik, senior portfolio manager at SlateStone Wealth LLC, told Reuters.
The confirmed U.S. Covid-19 cases surpassed 3 million, or nearly one of every 100 Americans, with alifornia, Hawaii, Idaho, Missouri, Montana, Oklahoma and Texas surpassing their previous daily record highs for new infections.
The markets have been range bound in recent weeks as investors digest optimistic economic data against rising coronavirus cases. Investors have been weighing the benefits of robust stimulus efforts against signs that the rebound in U.S. economic growth may have lost momentum.
“I would characterize the stock market as relatively immune to the [health]crisis,” Gregory Perdon, co-chief investment officer at Arbuthnot Latham & Co., told the Wall Street Journal, adding that it is difficult for stock prices to go down when they are supported by aggressive stimulus measures out of the Federal Reserve and European Central Bank.
Additionally, many are now waiting on the upcoming earnings season, with big Wall Street banks to report next week.
According to IBES Refinitiv data, S&P 500 company earnings are expected to plunge about 44% year-over-year, the sharpest falloff since the 2008 financial crisis. However, many traders are looking past the fallout toward the recovery process ahead as the economy tries to return to normal.
“Wall Street is looking ahead to 2021 earnings and pretty much ignoring 2020,” Sam Stovall, chief investment strategist at CFRA Research, told Reuters.
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