New Record for Nasdaq in Post-Holiday Market Surge

Another week, another rally, as markets keep closing the gap of losses from the spring.

People visit Ocean Beach during the coronavirus outbreak in San Francisco on Sunday. (AP Photo/Jeff Chiu)

MANHATTAN (CN) — The booming sound on Wall Street was not just the echoes of fireworks from the Fourth of July, but a building rally that boosted some markets to all-time highs. 

Coming off last week’s tepid finish, the Dow Jones Industrial Average gained 459 points, about a 1.8% increase, on Monday while the S&P 500 finished 1.6% higher.

Once again, the tech-heavy Nasdaq led the way for the other exchanges and set a new record, closing 2.2% higher to settle at 10.433 points, eclipsing its previous record from last week.

“NASDAQ HITS ALL TIME HIGH!” President Trump tweeted Monday morning.

Stocks abroad also fared well. Investors in China led the way for Asian markets, with Shanghai’s market closing up 5.7%, its best outing since 2015. With the exception of Australia, which finished slightly down for the day, other Asian markets also rallied. Hong Kong’s market gained 3.8%, while the Nikkei in Japan and Kospi in South Korea both approached 2% gains by the closing bell. 

In Europe, major exchanges in France and Germany clocked in at more than 1.5% gains, with the pan-European Stoxx 600 increasing 1.6% for the day. 

Investors had only scraps of economic data to gnaw over following the holiday weekend. The Institute for Supply Management stated that economic activity in the non-manufacturing sector grew in June after contracting in April and May. The ISM survey registered at 57.1%, nearly 12% higher than in May and about 7 points higher than many had anticipated.

Some experts cautioned, however, that the report shows manufacturing trending upward but does not point necessarily to a quick recovery. “The measure jumped in June but is still showing that firms are cutting their workforces fairly sharply,” wrote Joel Naroff of Naroff Economics.

Another data point that might present more of a curiosity for investors than would move markets is the disclosure Monday of borrowers under the Paycheck Protection Program, which shows a wide spectrum of companies — from publicly traded fast food chains and sports teams, to political organizations and religious groups — tapped the popular program.

But one trend proving difficult to ignore is the daily increase in coronavirus cases, which has become especially pronounced in the United States. 

“The sharp increase in confirmed coronavirus infections in the U.S. has raised fears that the recovery might soon stall,” wrote Goldman Sachs’ Chief Economist Jan Hatzius in an investor’s note. He underscored the deterioration of hospital capacity utilization over the last few weeks while new cases have gone up.

To date, roughly 11.5 million people have been infected by Covid-19 worldwide, while about 535,000 have died, according to data compiled by Johns Hopkins University. In the United States, nearly 2.9 million people have contracted Covid-19, while more than 130,000 have died.

“The most important data point for the next several weeks will not be any of the economic releases on the calendar but rather the rate of change in new deaths from Covid,” wrote Boris Schlossberg of BK Asset Management in an investor’s note. “Horrid and macabre as it is, the death curve has remained relatively steady providing little fodder for media headlines, but if the U.S. number begins to slope upward once again … the enthusiasm for risk assets is sure to fade.”

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