Wall Street Nudges the Issues Around COVID-19; Stocks Depict Solid Gains

Summary

• Wall Street is reflecting positive trends with NASDAQ Composite reaching record levels notwithstanding the continued rise in COVID-19 cases.
• Recently, tech stocks have shown impressive growth as a response to the changing preferences of people towards online shopping, cloud computing and much more.
• Also, signs of an economic recovery have begun to show and are helping in offsetting the uncertainties surrounding the pandemic.
• Nasdaq Composite hit yet another record closing high on 08 July 2020 supported by tech stocks.

Nasdaq was seen reaching intraday record high amid the continued rise in COVID-19 cases across the US and other countries. Of late, Nasdaq stocks have depicted significant gains with events like Amazon Inc. (NASDAQ:AMZN) trading past the US$3,000 mark, and Tesla surpassing the market cap of Toyota, the Japanese automobile behemoth.

With the outbreak of COVID-19, the stock markets across the globe ran out of the road to defy its impact. The markets tumbled, costing a pretty penny for investors with significantly low investor sentiments. Surging COVID-19 infections and restrictions have been taking a toll over the activities of investors in the market, and this has been happening for a while now.

Due to the high uncertainty, the markets remained highly volatile to the events unfolded by COVID-19, and investors could lose significant gains in just one day. A halt in economic activities was a significant concern for investors worldwide.

However, things look like moving upstream, and investors are back in the saddle to nudge the uncertainty brought around by COVID-19.

On Wednesday, 08 July 2020, the NASDAQ Composite index was up by 1.44% at 10,492.50 points. Around a month ago, on 11 June 2020, the index had plunged to 9492.727 points. Since then, the index has gained approximately 1,000 points in a month, which seems like a tall order seeing the prevailing situation of COVID-19.

NASDAQ Composite Movement (Source: NASDAQ)

In addition to this, the S&P 500 Index also improved on 08 July 2020 by 0.78% to reach 3,169.94. Common stocks of Tesla, Inc., Microsoft Corporation, Facebook, Inc., Apple Inc., and Amazon.com, Inc. remained the most active by share volume by 1:00 AM ET on 09 July 2020.

Let us take a look at some events to shed more light on the developments that are deriving gains on Wall Street.

Tesla Becomes the Most Valuable Carmaker

The market capitalisation of a high growth company, Tesla outstripped that of the Japanese automobile giant, Toyota, to become the most valuable carmaker globally. This is despite the fact Toyota sells significantly more automobiles than Tesla. However, it must be noted that Tesla is not limited to the automobile business.

The Company started in 2003 and has come a long way to surpass globally known automaker Toyota. Tesla stocks hit a high of US$1,135.33, taking its market capitalisation to around US$210 billion on 1 July 2020. However, the shares closed at US$1,119.63 with a market capitalisation of US$207.55 billion by the end of the session.

Tesla produced more than 102,000 vehicles and delivered over 88,000 vehicles during the first quarter of 2020. However, numbers might not reflect a similar story for the second quarter due to COVID-19. Although the factories in the US have recommenced operations after a shutdown, things might be a bit challenging amid the recent increase in the number of new infections.

On 08 July 2020, Tesla, Inc. Common Stock was noted at US$1365.88, down by 1.73%. The Company’s market cap was US$253.34 billion.

More at: Tesla Shares Soar Past Toyota to Become the Most Valuable Carmaker

Amazon Shares Making it to US$3000

6 July 2020 was a blockbuster day for the e-commerce giant Amazon. The Company’s shares soared 5.77% and closed the market session at US$3,057.04, crossing the 3k-level for the first time in its trading history. The gains for the e-commerce company are attributed to the sudden transformation to stay-at-home trend and accelerated adoption of the online marketplace and cloud computing across the globe.

We are looking at a company that is not only capitalising on the opportunity arising from the shift in consumer preference of online buying but also a dramatic shift towards cloud computing. Remote working and shopping through online modes have been a successful alternative for keeping consumers to shop as well as businesses operational. These shifts in the preferences and habits led by the COVID-19 pandemic have offered significant upside for tech giants like Amazon that are ready to hit it out of the park.

Details at: E-commerce Titan Amazon shares traded above US$3,000; would the rally continue in post-pandemic phase?

On 08 July 2020, the shares of Amazon Inc. closed at US$3081.11, up by 2.7%.

It looks like July is bringing optimism in the market out of the opportunities put forward by the COVID-19, especially for the tech companies. Other stocks like Microsoft Corporation Common Stock has moved up from a low of US$186.27 noted on 11 June 2020 to US$212.83 on 08 July 2020, up by 2.2% intraday.

On the same date in June, Apple Inc. Common Stock had plunged to US$335.9 but has managed to weather the COVID-19 storm and closed at US$381.37 on 08 July 2020, up by 2.33% intraday.

Similarly, Facebook, Inc. Class A Common Stock was up by 1.13% intraday and has risen from US$216.08 on 26 June 2020 to US$243.58 on 08 July 2020.

In addition to this, a whopping surge of 65.8% was seen in the National General Holdings Corp and Nasdaq hit a record closing high. This was supported by the tech stocks as initial signs of an economic recovery helped in offsetting the concerns for further shutdown amid escalating COVID-19 cases.