- The Dow Jones traded flat on Friday.
- A mixed US job report failed to boost inventories.
- Nancy Pelosi lifted the Dow from its lows by speaking of “impending” tax relief.
The Dow Jones traded softly to close the week as Nancy Pelosi’s optimism about business stimulus negotiations helped keep the stock market alive despite a significant sell-off on the Nasdaq.
Dow Jones is moving sideways on employment data
Of the three major US stock market indices, the Nasdaq was the weakest with a decline of around 2%. The S&P 500 lost 0.5% against a more resilient Dow Jones.
The Department of Labor published its much-anticipated Job report for September. Non-farm payroll growth was disappointing as the economy only added 661,000 jobs, up from expectations of 850,000. There was some good news in the unemployment rate, which fell to 7.9%, beating estimates, and indicating people are getting back to work.
Unfortunately, with corporate layoffs on the rise, concerns about the possible outcomes of the October report will unfortunately mount. The commodity markets are already pointing to a global slowdown in economic activity.
Check out the video below for an analysis of the numbers.
Look behind the job numbers, today’s research by ING shows how misleading the headline can be when it comes to the bigger picture of the US economic crisis. The economist James Knightley explains:
The “official” unemployment rate is now 12.58 million, but this only reflects people who are actively looking for work. Many people who have been employed in sectors that have been severely affected by the pandemic, such as leisure and hospitality, are not actively looking for work as there is not much out there but they can still get benefits under the applicable regulations. According to the Ministry of Labor, the total number of people applying for unemployment benefits as of September 12th was 26.5 million.
Stock market recovers after Pelosi “is imminent” stimulus aid
The good news for the Dow is that Nancy Pelosi continues to suggest an incentive is coming. On Friday, she asked the airlines not to cut staff because Help was “imminent”.
Add to hopes for a breakthrough President Trump’s positive coronavirus diagnosis, which initially destroyed the risk-weighted drugscan allow negotiations to proceed favorably. Check out the video below:
Another influence from Trump’s diagnosis was Biden’s chances of voting increase significantly. The justification is that Trump could lose valuable campaign time as voters pay more attention to his coronavirus response, which hurt his poll earlier this year.
Investors should do this with a pinch of salt, like British Prime Minister Boris Johnson saw a surge in support following his Covid-19 battle. It cannot be ruled out that Trump may suffer the same dent.
Dow 30 stocks: Tech Tumbles, Caterpillar Soars
It was a very mixed day the Dow 30when the tech sector had a hot day of trading. The trillion dollar giants Microsoft and Apple lost more than 2.5%. Intel and Salesforce.com confirmed the move away from technology and both fell. Amgen was the worst performer on the index as it lost 3.5%.
Check out the video below to gauge the impact of political uncertainty on the US stock market.
As growth stocks struggled, the flood of financial and value stocks was watched with rallies from Goldman Sachs, Coca-Cola and JPMorgan Chase. Surprisingly, Walmart did not participate in the rally as it lost 1.5% afterwards a strong performance on Thursday.
The top performer in the Dow Jones was Caterpillar, which was up 2.7%.