China opened its financial markets last this Monday since January 23, 2020, and US stocks seemed to rally on the reopening. It was revealed that the US dollar experienced significant gains including the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite, the latter owing the improvements to the significant rise of Tesla Inc.'s share values.
The US dollar was reported to have strengthened since China opened its financial markets for the first time this month. Along with the currency strength, global stocks also improved by Monday and lifted an unexpected rebound in the US manufacturing industry.
The surge in the Nasdaq benchmark was due to the increase in share value for Tesla Inc. that generated a 13.73 percent improvement. The parabolic climb has been consistent in the past few trading sessions.
The Dow Jones Industrial Average was at 1.44 percent rising to 407.82 points or 1.4 percent and finished at 28,807.6. The S&P 500 also rose to 1.50 percent amounting to 48.67 points and ended at 3.297.59. The Nasdaq Composite, on the other hand, got a significant increase of 2.10 percent advanced 194.57 points and closed at a record of 9,467.97, surpassing its highest value since January 23, 2020.
Gold futures, however, were recorded to have dropped by one percent after experiencing a four-week high. At present, China was reported to have been protecting its economy from the adverse effects of its economic slowdown and is seeking liquidity into its markets. Thus, it was seen that the inflows were centered into safe-haven assets.
Stock shares also declined in China on its first day of trading this month. The Shanghai Composite index decreased by 7.7 percent cutting back 420 billion USD worth of value from its benchmark. Consequently, the Chinese Yuan was also at its weakest level this year as it slid past its seven-per-dollar threshold.
According to the Institute for Supply Management (ISM), the US manufacturing index improved to 50.9 in January 2020, its highest value since July of 2019. The index also experienced an upward revision of 47.8 by December of 2019.
The report claimed that the values indicated expansion in the manufacturing sector. The said industry accounted for 11 percent of the entire US economy. According to the chief economist for the Americas at French bank Natixis in New York Joseph LaVorgna, the US economic outlook was bullish. He also advised that capital expenditures by corporations must likewise improve to keep up with the improvements in the US market.
