While US stock market remained in the red last week as several big hedge fund managers pointed lofty valuations and rough road ahead due to economic headwinds, the market begun the new week on a positive note with all three US stock indices rose more than 1% following Federal Reserve Chairman Jerome Powell warning that betting against the US economy would never turn out to be a good move.
Fed Chairman Jerome Powell highlighted the confidence in the recovery after a surprise drop brought on by the COVID-19 pandemic, but he also claims that the full recovery could take a longer time for complete stabilization.
“It may take a while. It may take a period of time. It could stretch through the end of next year. We really don’t know. But in the long-run and even in the medium-run, you wouldn’t want to bet against the American economy,”Jerome Powell
Jerome Powell said.
Oil prices also rebounded on positive remarks from Fed chairman. The US oil surged above $30 a barrel for the first time in the last two months while Brent is also trading above the $33 a barrel. The signs of recovery in economic activities along with cuts in supplies from the largest producers led oil prices to recover substantially in the past couple of weeks.
“Oil prices may show further upside momentum as the easing in mobility restrictions grows,”Stephen Innes
said Stephen Innes, chief global market strategist at AxiCorp in a note, referring to curbs that were designed to counter the coronavirus.
Tech stocks are among the biggest gainers over the last months as big money managers are showing confidence in these companies. Seth Klarman has added Alphabet, Facebook, and eBay to its stock portfolio while Saudi Sovereign Wealth Fund has also invested in Facebook and Disney.