Wall Street continues to rally

The US stock market is experiencing growth in the first full trading week of 2019.

Wall Street sign Source: Bloomberg

Wall Street has continued its upward swing on the strength of the US-China trade talks and a recovery in tech stocks. The US stock market has climbed by as much as 200 points.

Wall Street rises with optimism about China and tech

The US stock market has rallied over the last few days after the latest trade talks between US Secretary of State, Mike Pompeo, and Chinese Vice Premier, Liu He. Both sides expressed hope that the high trade tariffs between the countries can be lowered and they can sign a new trade agreement.

Financial experts like MRB Partners are hopeful that the talks will lead to an end to the US-China trade war.

‘The U.S.-China power struggle will persist for years, but both economies are now slowing and neither government has the latitude to pursue policies that could threaten to trigger a global recession. The Argentina [ G20 Summit] handshake will morph into a near-term truce’, said MRB strategists.

In addition the US- China talks, Wall Street surged because of FANG (Facebook,Apple,Netflix, and Google) shares. In contrast to Apple stock dropping after weak first-quarter (Q1) guidance, the tech company’s stock is up after chief executive officer (CEO), Tim Cook, assured investors in an interview that the corporation’s ecosystem is still solid.

Ryan Nauman, market strategist at Informa Financial Intelligence, noted that investors are confident after a downturn in tech stocks.

‘People are getting a bit more optimistic. I think investors noticed that the FANG stocks are solid companies and their valuations came down a lot after the big sell-off,’ said Nauman.

Volatility despite US stocks rally

While the recent US stock market rebound is encouraging, there are financial analysts that believe that volatility is not over yet in the stock market. Kate Warne, investment strategist for Edward Jones, noted that Wall Street volatility is typical when investors are presented with a lot of financial information and are uncertain about where the economy is headed.

‘You have new information that's driving stock prices both higher and lower, and that's pretty typical when there's uncertainty and there's a lot of new information coming into the market,’ said Warne.


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