Wall Street bulls push the market higher for the second consecutive day on Monday
- Traders focused on the improving outlook of the US economy and set aside worries of international trade.
- UBS Bank says that share buybacks amount to about 4.8 Billion a day, helping keeping US stock indices afloat
The three main US indices continued their advance for a second day in a row on Monday. The S&P 500 Index was up 0.45% to 2,746.46 while the Dow Jones Industrial Average gained 24,813.69 or 0.72%. The Nasdaq Composite Index rose 0.69% to 7,606.46.
Risk-on mood prevailed on Wall Street as investors decided to give a break to the US-China trade war worries and the recently imposed US tariffs on imported steel and aluminum. Instead, traders focused on the better-than-expected Nonfarm Payrolls data released last Friday.
Over the weekend, it has been reported that the US-China talks over the trade war have brought no conclusion while Canada, Mexico and the European Union plan to retaliate against the US tariffs.
On the macroeconomic front, the US Factory Orders on Monday came below estimates at -0.8% versus -0.5% forecast for April, the decline is attributed to a drop in commercial aircraft.
Meanwhile share buybacks are amounting to 4.8 Billion a day in the US. UBS Bank argues that corporations are likely to inject about $2.5 Trillion in buybacks, dividends and merger and acquisitions.
"Assuming improving growth and stable rates, we expect the positive positioning/flow backdrop to support US equities, which is important as the daily corporate flow slows from mid-June to mid-July," wrote Keith Parker, strategist at UBS.
Dow Jones daily chart
