The stock markets in the United States gained today after experiencing a selloff over the past six days. The recent volatility in the global stock markets was primarily caused by investors concern regarding China’s deepening economic slowdown.
Chad Morganlander, a money manager at Stifel Nicolaus & Co., told Bloomberg, “This type of short-term rally shouldn’t be much of a surprise given recent weakness. But nonetheless, investors are resetting the global growth expectations, and that’s having a deleterious effect in the longer-term.”
Yesterday, the U.S. equity markets climbed after the People’s Bank of China announced its decision ti reduce its benchmark lending rate to 4.6% and to lower its reserve requirements (RRR) for most big banks to 18%. By the end of trading session, the markets were down.
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Jasper Lawler, a market analyst at CMC Markets, commented, “Given the volatility, you cannot expect the way we open the market is the way we’ll close the market.” He noted that yesterday’s reversal “showed that.”
Meanwhile, Ray Dalio, the billionaire investor and founder of Bridgewater Associates expected the Federal Reserve to resume quantitative easing before raising interest rates.
In a post on LinkedIn, Dalio wrote, “We don’t consider a 25-50 basis points tightening to be a big tightening. While we might see a tiny tightening akin to what was experienced in 1936, we doubt that we will see anything much larger before we see a major easing via QE.”
- Dow Jones Industrial Average (DJIA) – 16,285.51 (+3.95%)
- S&P 500- 1,940.52 (+3.90%)
- NASDAQ- 4,697.54 (+4.24%)
- Russell 2000- 1,130.80 (+2.42%)
- EURO STOXX 50 Price EUR- 3,170.73 (-1.47%)
- FTSE 100 Index- 5,979.20 (-1.68%)
- Deutsche Borse AG German Stock Index DAX- 9,997.43 (-1.29%)
- Nikkei 225- 18,376.83 (+3.20%)
- Hong Kong Hang Seng Index- 21,080.39 (-1.52%)
- Shanghai Shenzhen CSI 300 Index- 3,025.69 (-0.57%)
Stocks in Focus
The stock price of Amazon.com climbed more than 7% to $500.97 per share. The e-commerce giant launched its Prime Now, which offers a one-hour delivery service of alcoholic beverages, chilled and frozen items like milk and ice cream and other items. The service is available in Seattle, Bellevue, Kirkland, and Redmond. Analysts at Evercore ISI upgraded their stock rating on the shares of Amazon.com to Buy and maintained their price target of $585 per share.
Cameron International surged more than 41% to $60.01 per share. The company agreed to be acquired by Schlumberger for approximately $12.71 billion in cash and stock.
Monsanto gained more than 8% to $97.08 per share after announcing its decision to abandon its proposal to acquire Syngenta and continues its focus on opportunities within its existing core businesses. The move came after Syngenta once again rejected its sweetened offer. The stock price of Syngenta declined more than 13% to $67.51 per share.