Investors pushed US stocks to a record high last week, buoyed by falling unemployment and progress in treating Covid-19 that gave hope of a return to the economy.
The S&P 500 index of blue-chip US stocks, seen as a benchmark for US corporate health, rose 2 percent for the week to Friday, its best weekly performance in four-and-a-half months, and its third consecutive week of all-new. High time.
The index was topped by companies that have been battered during the coronavirus pandemic such as airlines, cruise operators and casinos, after Pfizer announced that its antiviral pills had reduced hospitalization rates from Covid-19 by 90 percent.
Evidence that the US economy is pulling itself out of the pandemic-induced slowdown bolstered the latest jobs report showing a rebound in job growth in nearly all sectors after several months of lackluster gains. More than 500,000 new jobs were created in October, and the unemployment rate fell to 4.6 percent in a move that beat economists’ expectations.
“We are on the train to normal,” said Christina Huber, chief global market strategist at Invesco. We are not there yet but we are definitely moving in the right direction. Growth is accelerating again and new developments in the treatment of Covid have helped it.”
Scott Gottlieb, a former commissioner of the Food and Drug Administration and a member of Pfizer’s board of directors, said Friday that the pandemic could be over by January.
Live Nation Entertainment, which hosts live concerts that have been scaled back due to social restrictions during the pandemic, rose more than 20 percent for the week, the biggest move higher since March 2020 when the Federal Reserve first intervened in financial markets to calm the economic downturn. from the epidemic. Cruise operator Royal Caribbean was also among the biggest risers for the week, up more than 14 percent.
“We have moved into a new phase of the pandemic,” said Rebecca Patterson, director of investment research at Bridgewater, adding that the upside tremor in stock markets was underpinned by dovish comments from central banks this week.
The Federal Reserve took its first major steps toward ending pandemic-era crisis support for financial markets on Wednesday.
The US central bank announced that it will start scaling back its $120 billion per month asset purchase program with the goal of ending stimulus completely by the second half of next year.
The decision came as no surprise to investors, who had waited for guidance for months as deliberations continued among Federal Reserve officials.
Fed Chairman Jay Powell’s reassurance that the central bank is taking a patient approach when it comes to raising interest rates also helped ease investor concerns that a fundamental move toward higher borrowing costs was imminent.
“He’s doing everything he can to avoid confusion,” Huber said.
Additional reporting by Nicholas Megaw and Kate Dugwid