fxstreet.com 02 Feb, 2021 22:45 am

Stocks rally amid stimulus/vaccine optimism, strong earnings from AMZN and GOOG

Stocks rally amid stimulus/vaccine optimism, strong earnings from AMZN and GOOG
It was a strong day for the US stock market; the S&P 500 closed 1.4% higher, rallying back to the north of the 3800 level again. Equity market bulls w

Equity market bulls will have all-time highs at around 3870 in their sights this week.Market commentators have cited a number of positive catalysts as behind Tuesday’s strong equity market performance; US stimulus hopes are growing again as the Senate voted in favour to open a debate on budget reconciliation (a process that would allow the Democrats to pass stimulus spending without Republican support) and haggling between Senate Republicans and the Biden administration gets underway.Tuesday’s data suggests the vaccine is likely to be able to gain regulatory approval in the EU and access to this jab might help the country speed up its lagging vaccination efforts; though the EU has expressed a preference for vaccines made domestically or in the UK or US, EU member state Hungary has already approved and begun distributing the Sputnik vaccine and other member states are likely to follow suit.The paper suggested that the vaccine is likely to have a substantial effect on the transmission of the virus with a 67% reduction in positive swabs among those who had been vaccinated.

Vaccine news was also positive on Tuesday, further boosting sentiment, while Alphabet and Amazon both continued the recent string of stronger than anticipated US tech earnings releases.Strong data from these two tech behemoths will further add to the recent string of strong earnings releases that have underpinned risk appetite as of late; according to IBES Refinitiv data cited by Reuters, more than 80% of the earnings reports released from S&P 500 companies so far have beaten expectations and 97% of reports from technology companies have beaten expectations.

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