Bullish days may continue for U.S. stock market

Source:Cfbond 2018-10-12 17:40

By Yin Lei

Securities institutions believe the recent broad-based slump at the U.S. stock market doesn't mean an end to its bullish days, according to a report of Shanghai Securities News on Friday.

Gloomy days for the U.S. stock market continued into Wednesday. After the end of trading, the NASDAQ Composite suffered its worst daily drop since June, 2016, plunging by 1.25 percent, while the S & P Index saw a decline of 2.13 percent, the biggest tumble in eight months, to reach its lowest level since Aug. 16.

This market is under further pressure on fear of the remarks of U.S. President this week who blamed its drop on the tightening monetary policy of the Federal Reserve. Last month, driven by its optimistic outlook for U.S. economy, the Federal Reserve raised the USD's interest rate by 25 basis points to a range of 2 percent to 2.25 percent and hinted at another rise this year.

As panic spreads among investors, some financial institutions still see a silver lining. The U.S. stock market, supported by the sound economic fundamentals of this country, is not at the end of its good time, they pointed out.

Statistics revealed that America's economy remains on a positive track that overshadows its European peers, said Huang Jun, chief Chinese analyst of Gain Capital.

According to data from the U.S. Bureau of Statistics on Oct. 5, America's unemployment rate in September was down by 0.2 percentage point to 3.7 percent, and its personal consumption expenditures (PCE) Index is set to move as expected.

A report by UBS Securities said while stocks are losing some attractiveness amid concerns over the higher interest rate, America's economic fundamentals still enjoy a bright prospect and may sustain bullishness at its stock market for some time.

The tumble at the U.S. stock market doesn't represent a broad-based correction since its fluctuations mainly stem from technology and telecom services stocks, according to Medha Samant, an investment director at Fidelity International.