Wall Street continued to go up even though there is a lot of worries bugging the market. As evidence, the NASDAQ and the DJIA both closed at record highs.
Meanwhile, the S&P 500 closed just below its all-time high, which it reached just the day before.
These gains have come as a result of the robust earnings from companies.
The markets expected something worse, but earnings figures were not having it.
As of last week, 71% of all the members of the S&P 500 index already reported their results. Of those companies, 76% topped forecasts.
On top of that, FactSet says that 61% reported sales that topped analysts’ expectations. Such a feat is vital as concerns of economic slowdown loom large.
Last summer, financial markets traded on pins and needles amid Brexit woes, economic slowdown, and the US-China trade war.
Still, there is a reason to take the reports with a tubful of salt.
Record Highs for NASDAQ and Dow, but Expectations were Low
It’s worth remembering that expectations for this quarter were low.
Analysts have taken into consideration the companies’ woes to deal with the current economic climate.
To explain that, FactSet says profits in the S&P 500 are down 2.7% from the same period last year.
But now that companies have beaten expectations, they have a baseline in the DJIA and NASDAQ where they can rally.
The upbeat mood now adds to the history of the US economy of defying fears of a recession.
Jobs report, economic growth, and consumer confidence reports all indicated a resilient US economy.
Last week, the government said employers fetched 128,000 jobs last October. The gain was not that big.
However, taking into consideration that 50,000 GM workers took a strike, the figure is already good.
At the same time, both the US and China have given signals that a trade deal is closer to materializing.