Positive Sentiment Continue to Send Markets Higher

By Joyce Yu

Philadelphia, PA–Global markets rallied on Monday after trading sideways for days as investors remain cautiously optimistic about corporate earnings and US tax plans.

The Dow Jones Industrial Average gained 153 points or 0.68% Monday, while the S&P 500 and NASDAQ added 0.39% and 0.32% respectively.

U.S. stock index futures were slightly higher, pointing probably another positive day today. All three US indices opened higher this morning.

The rally in the US stocks market since March 2009 has been the second-longest bullrun in the US history, showing no signs of running out of steam. Tracing the movement of S&P 500 index against the operating profits of its companies, the market looks expensive.

Dragged further into record territory by the advance of technology shares this year, the S&P needs fresh boosters on the outlook for corporate profits or a surprise breakthrough in Washington that cuts corporate tax rates.  It seems investors appear hopeful of the progress.

SEB investment management’s global head of asset allocation Hans Peterson attributed equity markets’ continued rally to stronger economic and trade data as well as increased corporate spending.

“It will take over from the consumption cycle and means the (global business growth) cycle will be longer than consensus. So I think that is the mechanism that is driving equities at the moment,” he shared with the Reuters.

Investors are also hopeful about the upcoming third-quarter corporate earnings.

S&P 500 companies’ Q3 earnings are expected to increase 6.2% year on year, according to Reuters research, after a better-than-expected 12.3% increase in the second quarter.

Today, the U.S. Commerce Department will release its September Auto Sales report and the National Retail Federation will release its U.S. holiday sales forecast on Tuesday.

Separately, demand of firearms in the near term is expected go up following the mass shooting in Las Vegas on Sunday as people are concerned about personal safety. Shares of gun maker Sturm Ruger was up 6% on Monday, while American Outdoor Brands gained nearly 7%.

Gun sales slumped after Donald Trump was elected the US president and shares of gun makers have mostly been lower since.