Decoded! Anil Singhvi reveals why Dow Jones' good show is not reflecting in global markets

US markets are seeing a liquidity driven rally and the markets could further move north, Zee Business Managing Editor Anil Singhvi opines. One must not be surprised if the Dow Jones sees a rally of 700-800 points from here, he added. On Tuesday, the Dow Jones saw a 530 point rise and ended at around 25000 levels.

The S&P-500 has also breached the 3000 mark first time since 5 March.

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However, the effect is not rubbing on to the global markets. Singhvi attributed this momentum to the presence of enough liquidity in the US markets. He said that the Federal Reserve Bank has ensured that there is no dearth of liquidity and has been consistently printing money.

He also said that the sentiments for consumption activity have improved in the country. US is the biggest consumption based economy in the world and its economy is primarily driven by consumption. President Donald Trump has been trying hard to drive consumption in the country to lift the economy, he added.

The consumer confidence index has indicated positive signs in May. The numbers for new houses sold have been better in the month of April.

He said that US economy relies on consumption much more than it does on manufacturing. Though, the Trump administration has been giving economic packages to the companies, it cannot make US the same manufacturing hub like China.      

The opening of economy and anticipation of a coronoavirus vaccine are also acting as triggers for the US markets, Singhvi said. In fact, the markets have been ignoring unfavourable news coming from the coronavirus front or the US-China tensions.

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Even when the coronavirus cases have been rising in the country, and the country has seen over 1 lakh deaths, the Trump administration is pushing for opening the states from the lockdown status. There are indications that consumption will further rise and the people are now in the mood to buy, Singhvi said.