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Stock indices in the US skyrocket to historic records

Stock indices in the US skyrocket to historic records

American stock indices S&P 500 and Nasdaq. Which fell at record rates back in March, have now reached historic highs. According to Reuters, the increase comes after the release of the quarterly figures of retailers Target and Lowe's.

The results of these corporations were better than expected. Target Corp jumped 9.5% after the US retailer posted record-breaking quarterly comparable sales growth in its history. Lowe's Companies Inc rose 1.4% after the company posted better-than-expected LFL sales for the second quarter thanks to demanding for home goods during the coronavirus pandemic.

Against this background, by the close of trading on August 19, the Dow Jones index rose by 0.37%, to 27.881.90 points, the S&P 500 index added 0.20%, to 3.396.61 points, and the Nasdaq — 0.18%, to 11.231, 10 points. The S&P 500 closed at an all-time high on August 18, recovering from huge losses caused by the coronavirus pandemic. The Dow is still nearly 6% behind its February peak.

US equities are also supported by hopes for yet another round of budget aid to the coronavirus-hit economy, after increased payments to the unemployed ended in July. However, Democrats and Republicans have not yet been able to agree on the key points of the bill for such assistance.

“The results reflect the opening up of the economy and stimulus payments.<...> This quarter could be very different if stimulus payments are not received within the next few weeks, but it does not seem possible at the moment,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

As reported, the US administration and Republican senators believe that the package of measures to stimulate the American economy adopted in March in the light of the pandemic implied too large payments to citizens, this was taken into account when developing a new plan to combat the consequences of the coronavirus.

We will remind, earlier the International Monetary Fund (IMF) calculated that in general, a way out of the global economic crisis will require more than $ 8 trillion. The IMF also officially announced the onset of the global economic crisis and changed the estimate of the dynamics of the global GDP in 2020. The global economy is expected to contract by 3% this year but will grow by 5.8% in 2021.

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