It was clear Monday morning that traders were set to make it the best August in 30 years. And they did. Dow Jones futures rose at 80 points while S&P 500 and NASDAQ 100 futures also finished with a bang.
S&P 500 was up 7.2%, making this the biggest gain since the 1980s. The Dow is more than 8% this month, and traders can’t believe that it has been the best August in more than 30 years.
S&P 500 gains this month have confirmed that there is a new bullish market trend. The Dow eradicated its losses last Friday and closed with a year-to-date high of 0.4%. This positive behavior is a sharp turnaround from the March 23 lows. From then, SP&P was up 60.1% and the Dow at 57%.
Early this year, the Federal Reserve has kept the rates to zero and started an open-ended program for asset purchasing to boost the economy like the US and the rest of the world battled with the coronavirus pandemic. It was just last week when the central bank discussed a new inflation policy plan that will ensure rates are kept lower for a more extended period.
Warren Buffett Berkshire Hathaway Acquires Japanese Trading Companies
To bet on the struggling global economy, Warren Buffett has announced that Berkshire Hathaway has purchased stocks equivalent to more than 5 percent in Japan’s leading trading companies. The conglomerate has acquired Itochu Corp., Mitsubishi Corp., Marubeni Corp., Mitsui & Co., and Sumitomo Corporation. These businesses import different kinds of products to Japan and provide a variety of services to other manufacturers.
New Dow Components, Tesla and Apple Stocks Split
The new Dow will have new members: Salesforce, Honeywell, and Amgen will be officially traded, replacing Exxon Mobil, Raytheon Technologies, and Pfizer.
Apple will feature a stock split on Monday, while Tesla stock will now be cheaper. It is uncertain if Apple and Tesla’s runs will remain despite these major stock split news.
Traders are also looking forward to the most recent US jobs report release, which will happen on Friday. Experts say that around 1.25 million jobs were generated in August.
Meanwhile, the price of gold rises and the dollar dips after the Fed’s policy shift. Asia’s stock markets were hit after Japan’s Prime Minister Shinzo Abe stepped down due to health reasons.
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