Stocks Rally on Economic Recovery

US stocks rallied Tuesday on bullish retail data, as the latest sign that the worst of the pandemic-induced economic shock has passed.

Not only did US equities gain an the exorbitant record of 17.7% (the biggest monthly increase in retail spending since 1992), causing the Dow to trade 2.3% higher, S&P 500 - 2.1% and Nasdaq - 1.8%, the markets have also seen a positivity boost on the hopeful data from a vaccine study in coronavirus treatment.

The cherry on the cake has been Trump’s $1 trillion infrastructure bill preparation - a push to spend more on roads and bridges in attempt to drive job growth after the pandemic. This adds to the surprising last month’ 2.5 million jobs added by US employers and an unemployment rate fall to 13.3%.

Capital Economics believes that as of now the US economy will contract at an annual rate of 30% in the three months to July, compared to its previous 40% plus estimate.

Indeed, it appears that all the positive news are currently leaving the geopolitical tensions and the fears of a second coronavirus wave in the background.

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