Amid a flurry of higher-than-expected earnings and strong performances by technology companies, the S&P 500, Dow Jones, and Nasdaq 100 ascended to close-on record highs on Wednesday. This is further underlined by renewed optimism courtesy of an economic stimulus package that is set to be rolled out as the Democrats take charge of the White House. With a positive outlook for 2021, investors are keeping a close eye on earnings as companies are set to report in the coming week.
Tech firms continue upward trajectory
Many of the top technology companies have come out of 2020 and seem to have shrugged off any chances of underperforming amid a torrid year for many. One reason can be attributed to a lack of lockdown regulations across the US in the fourth quarter.
Netflix took top honors and was the best performer in companies that make up the S&P 500. It managed to climb 17% and has announced that it doesn’t need to borrow any more money for day-to-day operations. This can be credited to its mammoth subscriber base, sitting at 200 million. In addition to this, Netflix is looking to engage in share buybacks throughout the coming months. Many investment firms had disregarded the possibility of companies repurchasing stocks considering the current climate.
Netflix hasn’t been the only one to enjoy higher share prices as a number of technology companies experienced strong gains throughout Wednesday. Apple, Google, and Microsoft are set to report earnings next week and many are eagerly-anticipating a rise in the value of share prices amongst the giants of technology.
Nasdaq 100 increased by a full 2% as technology companies weighed in, the Dow Jones saw a 0.8% gain, while the S&P 500 managed to rise by 1.4%. All of which has spurred further optimism and enthusiasm within the investment industry.
Futures rise on the back of promising news
Stock futures are the biggest winners on the back of the latest reports and investor confidence. This was particularly prevalent on the Nasdaq 100, where a variety of tech companies dominate the index. The index may well continue to climb as the week comes to a close. Although the S&P 500 and the Dow Jones experienced smaller gains, a strong run may well be on the horizon. PNC Financial Services looking to buy BBVA in the US is another indicator of active activity within the market.
However, not all sectors can expect to reap the benefits of a revitalized outlook as the pandemic is set to adversely affect these sectors for some time to come. As such, various markets are set to receive backing from the central bank on the expectation that lacklustre performances will continue. But, the added support and a continued improvement in the overall outlook will help reduce volatility and bring much-needed stability to investments across the board. Although a recovery is well under way across the globe, there has been a stiff warning against complacency on global economy from IMF Chief.