On the US horizon, there are rising employment numbers and positive earnings, with pandemic starting to be addressed in the past tense.
The performance of Wall Street alone symbolizes this renewed energy, as more and more data show that corporate America is coming back and the renewal is going on.
According to Goldman Sachs, the S&P 500 has produced returns including dividends of 27% so far this year as the blue-chip index has set record highs in more than 60 days. Last week alone, US markets mobilized 2%, the best performance since June.
Pfizer’s announcement of their antiviral pills which could reduce the Covid-19 hospitalization rates by 90% rejuvenated the economy.
This was evident in the sectors of casinos, cruise ships and airlines, the three of four (the other being the theatre industry) industries that suffered worse during the pandemic.
Another evidence for this revival in the US economy is the employment sector. The latest monthly job reports show that, after several months of lacklustre movement in the field, there is a spike in job growth throughout many sectors.
Unemployment rates fell by 4.6% as more than 5,00,000 positions were created in October, which exceeded the expectations of the economists.
Another boost to the economy will be the $1.2tn infrastructure spending bill passed by the US House of Representatives on Friday.
Kristina Hooper, the chief global market strategist at Invesco, said that the US economy is on the path to pre-pandemic normality.
The economy has not yet touched that level but it is definitely on the right way, with re-accelerated growth, helped by the easing pandemic.
The chief US economist at Barclays, Michael Gapen, pointed out that last week’s report shows an uptick in US automobile sales, and a survey related to activities in the American service sector shows rising at an unprecedented rate.
There are visible signs of confidence in large US companies. As they find solutions for problems like price hikes of raw materials, supply chain deficiency and labour issues.
The profit of organizations recorded on the S&P 500 rose around 40% in the third quarter.
According to Goldman Sachs, the profit margins are 0.7% points better than what the analysts had anticipated, even though the profit margin has slipped to 12.3% from 12.6% from the previous quarter on aggregate.
Goldman Sachs also added that the companies have survived the triple threats by relying on pricing power.
The American entertainment giant, Live Nation Entertainment, Inc., the group which puts on concerts, which saw a low activity during the pandemic, has seen a 20% increase in the week.
The cruise shipping giant the Royal Caribbean, became another high performer by 14%.
The Federal Reserves began the gradual process to end pandemic-era crisis support for financial markets, and wishes to end it altogether by the second half of 2022.
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