Industry and real estate data indicate that the United States is booming after last year’s disaster. It is not known how long it will hold, but the New York indexes have once again reached historic records.
US new home sales in March surpassed market consensus by more than 15% and reached the highest level since 2007. In turn, the US industry PMI has, as expected, improved the historical record (but this data is only dated May 2007) , As it rose to a peak of 60.6 points.
“The US economy is enjoying a strong start to the second quarter, as it is rushing through all the pitfalls thanks to easing viral restrictions, impressive progress in vaccination, clearer forecasts and fiscal stimulus, all of which helped boost demand,” says Chris Williamson, chief economist at IHS Markit. , In a comment on the results of the PMI survey. The market consensus assumes that already in the first quarter, the annual GDP growth rate of the United States accelerated to 5.7% from the 4.3% recorded at the end of 2020.
The narrative of the ongoing economic boom has calmed fears of a drastic increase in the capital gains tax. Who has been buzzing on Wall Street since Thursday. On Friday, New York indices recovered from Thursday’s losses. The S & P500 rose 1.09%, ending the week at 4,180.16 points. The Nasdaq rose 1.44%, and regained 14,000 points. The Dow Jones Industrial Average was weaker, rising only 0.67% and then rising again above 34,000 points. All three major indicators were just below the April records.
The season for publishing first quarter reports begins on Wall Street. Analysts estimate that the companies making up the S & P500 are reporting earnings increase of more than 30% year-on-year. This is part of the low base effect from a year ago, but it is also a reflection of the rapid return to profitability of US companies. However, even considering the optimistic outlook for the second half of 2021 The S & P500 is valued at 22.5 times expected earnings Companies in the next 12 months – according to Factset. This level is nearly 40% above the historical average, reflecting the (relative) measure of the revaluation of US stocks.
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