The S&P 500 index and the Nasdaq reached an all-time high on Tuesday as the stock market recovers fully from the fall it had in December 2018. The records tumbled as some major companies started reporting positive earnings. The S&P ended the day at 2.933.68 a rise of 0.9% and a good 3 points above the September record high. The Nasdaq composite which has tech stocks mainly increased by 1.3% and was at 8,120.82 while the Dow Jones rose by 0.6% to 26,656.39 170 points short of an all-time high.
The stocks in Wall Street increased as Coca-Cola Co, Twitter, Lockheed Martin Corp, etc. reported positive results and eased the nerves of investors as they were cautious with profits expected to drop in the first quarter. Adding to that the Federal Reserve has indicated that they will pause the rise in interest rates for this year after increasing it many times in the last two years. Additionally, companies are forecasting optimistic growth for the next quarter too putting the stocks under less pressure.
Kate Warne who is an leading investment strategist said that the strong earnings posted by companies will only continue to raise the prices of stocks and said ‘We are now seeing more signs of solid economic growth as well as indications that companies not only are reporting better than expected first-quarter earnings but also are continuing to guide for modest earnings growth throughout 2019’.
Traders are more optimistic of the economy globally with the Chinese posting a steady export data in the first quarter, a trade war with the US and China ending with a good trade deal and the US posting strong job growth in March. Despite the analysts’ prediction of weak earnings the solid results posted has buoyed investors and traders.
Investment strategist Willie Delwiche said ‘New highs, in and of themselves tend to be bullish and tend to beget more new highs. You have the combination of Fed friendliness, the economy still in good shape and some expectations from an earnings front being reset that create a fundamental backdrop that isn’t all together unfavorable for stocks’.
The earnings reports of many big companies like Microsoft, Boeing which is facing a slew of legal cases, Caterpillar and such are yet to be announced. Moreover, many companies like Harley-Davidson and Procter & Gamble reported a decline in their profits.
Thus it is too early to say if Wall Street’s expectations will be exceeded or not.