This article was originally published on ETFTrends.com.
U.S. markets and stock ETFs maintained their momentum on Wednesday as updated data revealed a healthy economy.
Fueling the positive mood on Wednesday, the ADP National Employment Report revealed private-sector payrolls increased by 291,000 in January, compared to expectations of 156,000 additions, Reuters reports.
Additionally, the Institute for Supply Management’s data showed U.S. services sector activity gained in January after an strong manufacturing report earlier this week.
“There is increasing recognition that the consumer is remarkably resilient,” Elliott Savage, portfolio manager of the YCG Enhanced Fund, told Reuters. “Growth is still decent, and if you’re looking around to put your money, stock market is just a much more attractive place than government bonds.”
The markets have more-or-less recovered from their stumble last week after China's central bank took aggressive steps to support a potentially ailing economy in face of the virus outbreak. Looking ahead, the People's Bank of China is expcted to lower its key rate on February 20 to further combat the negative economic effects of a spreading coronavirus.
“The story in the market is the repricing of the virus fear," Peter Schaffrik, a global macro strategist at RBC Capital Markets, told the Wall Street Journal. “What people are currently looking at is the rate of spread of the outbreak: the number of cases is still going up, but the growth rate is slowing down."
Investors have also gained confidence in face of upbeat quarterly earnings and growth projections. We are already half way through the current U.S. earnings season and Corporate America has largely beaten Wall Street estimates.
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