Wall

Explaining the market rally in Wall Street’s terms

By April Joyner and Kate Duguid

NEW YORK (Reuters) – Risk assets such as stocks and high-yield corporate bonds have climbed over the past two-and-a-half months despite a dire global economic outlook in the wake of the novel coronavirus pandemic.

The rally has left some market observers scratching their heads but has also given rise to a bundle of jargon – some old, some new – attempting to explain recent trends. Here’s a guide to what’s driving financial markets now, in Wall Street’s own words.

DON’T FIGHT THE FED

One key factor in Wall Street’s climb, strategists say, is the unprecedented monetary support from the Federal Reserve, including purchases of corporate bonds and exchange-traded funds. The Fed’s balance sheet has expanded by some $3 trillion since March. Those actions have revived the slogan “Don’t fight the Fed,” as the liquidity supplied by the U.S. central bank has fueled an upward

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Wall Street ends higher on recovery hopes, Nasdaq hits another record

By Sinéad Carew

(Reuters) – Wall Street’s three major indexes closed higher on Tuesday as improving economic data and the prospect of more stimulus bolstered hopes of a swift recovery, while a jump in technology shares powered the Nasdaq to another record high.

While all the indexes pared gains late in the session to close below their peaks for the day, the Nasdaq managed to register its fifth record high close this month. Apple Inc provided the biggest boost followed by Amazon.com and Microsoft.

Data showed that the pace of contraction in the U.S. manufacturing and services sectors slowed in June as businesses reopened after lockdowns that started in mid-March.

Also, new home sales jumped 16.6% in May, blowing past estimates of a 2.9% rise.

“The cumulative effect of the economic data we’ve been seeing is helping to support the V-shaped rally we’ve had in stocks,” said Mark Luschini, chief

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