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World Stocks reach record high


On Tuesday, stock markets around the globe ramped up in response to promising economic indicators from both China and the United States.


The MSCI, World Country Index, which measures 49 countries, hit an all-time high as European stocks performance improved, causing them to catch up to their Asian and American counterparts.


The pan-European STOXX 600 index hit a record high after the market opened in Europe.


However, Japan’s Nikkei was pushed down by 1%, pulling the Shanghai Composite down.


Meanwhile, the S&P 500 closed on Monday with a record peak and futures fell by 0.2% on Tuesday.


These rising markets have likely been a result of the public health and improving economic measures and stimulus by the United States as well as other nations.


Under the Biden administration, a $1.9tn economic stimulus has been released and this stimulus has been partially used on paying welfare to disadvantaged Americans.


This decision has enabled these poorer Americans to somewhat maintain their living standards towards the end of the pandemic, but, some more well-off Americans have likely used it to purchase luxuries.


This is because an instant injection of cash into the pockets of consumers is bound to make them feel somewhat confident, and this increased confidence translates into spending.


So, because of the stimulus, American consumers have been spending more, causing an increase in aggregate demand within the American economy.


Because of this increased consumer spending, businesses get busier, meaning they have to import more goods and services, and some of these imports may come from China.


Consequently, may have also seen an increase in economic activity, so, as a result of the stimulus, both American and Chinese companies have seen improved performance yielding a rise in their respective stock markets.


Additionally, the vaccination rollouts in both the European Union and America, a nation that has exceeded its target of vaccinating 100 million Americans, has had extreme benefits on the public health of their populations.


The decreased consumer confidence during the pandemic has been due to the health risks associated with the virus, therefore, any increase in vaccination rollout and public health will also cause confidence to rise.


Hence, the combination of economic stimulus packages and improving public health across the globe has caused American, European and Asian stock markets to rally in recent days.

 

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