Following steep losses, the Dow Jones Industrial Average remained in the red area. However, it has recovered most of its earlier steep losses and the market has just started to normalize.
This owes to most companies exceeding expectations in terms of earnings. One of the major points to note is the fact that about 52 of the 74 companies to report their earnings had all exceeded analysts’ and forecasters’ expectations by far.
In the third quarter of Thursday, only 38% of the companies saw their shares slide after reporting their earnings. The number of companies seeing their shares rise has been significantly higher than that of the companies that saw their shares slide. This is what has majorly helped in recovering from the steep losses that the stock market had earlier incurred.
What remains to be solved is what’s keeping the US market from soaring high. The market is definitely showing positive trends and going by it, it should have been out of the red area by now. However, it’s a mix of varying earnings along with the deadly Coronavirus in China that is really keeping the US market from soaring high.
Wuhan has been locked down by the Chinese government following the outbreak of the deadly Coronavirus. Devoid of recent productivity, The Shanghai Composite suffered its biggest loss since May of 2019, sinking by 2.8%.
Even crude oil prices have been hit hard by the virus outbreak. Crude oil prices have now dropped down by 2.8%, as investors are afraid that the outbreak might decrease its demand. Likewise, energy stocks fell by 0.3%.
As long as the outbreak persists, it is difficult to predict how long it would take for the US market to soar. However, trends show that a soaring high growth is greatly plausible, and it is only a matter of “when” rather then “if”.