Nasdaq Composite Enjoys New Highs While The Dow’s 6-day Winning Streak At Risk
Gaining 1.1% on Monday, June 8, the Nasdaq Composite finished the trading day strong, hitting a new closing high not seen since February 19. The S&P 500 index ended 4.5% short of its highest close seen on February 19, while the Dow was 7% off its closing record on February 12.
Then, on Tuesday, June 9, the National Bureau of Economic Research officially declared the US to be in a recession.
Despite this, investors and the markets seem to be continuing to react positively to the ongoing global pandemic and the US recession, showing real faith in the market’s ability to withstand challenges. The overwhelming view seems to be that while the recession will be deep, it’s also likely to be short-lived.
Having said that, there were still some losses suffered by US stock benchmarks by the end of Tuesday morning trading, especially those companies making noticeable gains in Monday’s trading. Down 24.8% on Tuesday was Transocean, notwithstanding its 50% gain the day before. Royal Caribbean also dropped 9% on Tuesday, wiping out its 8% gain from Monday.
The Nasdaq Composite though continued to do well, hitting an intraday high which seems to be fuelled by investments in several of the biggest technology-based companies on the index that are bearing up well despite COVID-19. Apple and Amazon were both up between 3% and 4% on Tuesday, setting new all-time record highs as their respective businesses remain red-hot.
Climbing 0.8%, August gold on Comex also saw positive movement, so this is potentially one to watch while so many other assets see their value drop.
Assets seemingly in decline now include oil, with West Texas Intermediate losing 40 cents on the barrel on the New York Mercantile Exchange following drops of 3.4% on Monday and 1.1% on Tuesday. Here there are fears of an increase in production by those countries who do not intend to continue the production cuts currently being extended by OPEC+.