U.S. markets and stock exchange traded funds regained ground on Monday and brushed off earlier concerns of an uptick in coronavirus infections as traders focused on the economic recovery.
On Monday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 1.0%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) gained 0.4%, and SPDR S&P 500 ETF (NYSEArca: SPY) rose 0.5%.
Dragging on markets in the early morning, the World Health Organization tallied a record increase in global coronavirus cases on Sunday, and a number of states in the U.S. South and Southwest also revealed a record rise in new cases with 10% to 20% of people testing positive in some, Reuters reports.
However, assuaging outbreak fears, White House economic adviser Larry Kudlow told CNBC earlier in the day that there was no second wave of the pandemic and that there won’t be another widespread shutdown.
“I would say we’re in no man’s land right now,” Nate Fischer, chief investment strategist at Strategic Wealth Partners, told the Wall Street Journal. “I think to consolidate and move sideways is the best thing for the market. To have it take its breath and digest market events that really matter.”
Sam Stovall, Chief Investment Strategist at CFRA, also argued that investors were beginning to look ahead toward the next earnings season and into 2021 when corporate America is expected to recover. According to Refinitiv data, analysts expect a 42.7% drop in earnings per share for the second quarter.
“It can’t get much worse than this. People are hoping that and concluding that you can’t injure yourself by falling out of a basement window,” Stovall told Reuters.
But he asked, “How can you really get optimistic about what you don’t know? … Wall Street looks to the other side of the valley but we still don’t know how low or wide the valley is.”
Further adding to the technology rally on Monday, Apple announced new products at its annual conference for software developers.
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