US Stocks Start Week with Gain but One Prominent Analyst Predict Year-End Correction
U.S. stock markets are setting the path for another rocking week because all the major indices have reported gains last week and ended the second quarter with a record-breaking performance in decades. The markets are building momentum despite the fact that coronavirus cases jumped sharply in the past couple of weeks.
Dow Jones Industrial Average futures jumped more than 1% after posting more than a 3% increase last week. Meanwhile, the S&P 500 and Nasdaq futures also rose more than 1.2% on Monday; the broader market index rose almost 3.3% last week and the tech-heavy index grew 4%.
All three indices have been building on the second quarter momentum as US stock markets wrapped up its best quarterly performance in decades.
S&P 500 jumped nearly 20% during the second quarter while Dow and Nasdaq grew 17% and 30%, respectively.
The market have been shining despite the massive increase in coronavirus cases. The World Health Organization said on Saturday that one-day coronavirus infection stood at a record level of 200,000, driven mainly by infections in American region.
Christophe Barraud, who is the chief economist of the broker-dealer Market Securities and ranked Bloomberg’s most accurate forecaster, claims that US economy wouldn’t return to 2019 level until 2022.
He also claims that the massive year-end correction is highly likely. “It will take a long time for life to return to normal,” Barraud told Business Insider.
“Markets are not pricing in a lot of risks due to dovish fiscal policy, or the potential for another round of stimulus in the short term as countries deal with the virus,” he added. He says that second-quarter rally was supported by heavy buying from retail investors.