The Dow Jones slipped on Friday, as Intel’s crash weighed on the index. Deadlocked stimulus negotiations and surging coronavirus cases were additional concerns for the U.S. stock market.
Of the three major U.S. stock market indices, the Dow Jones was the weakest, as the Nasdaq and S&P 500 traded flat.
In economic data, U.S. PMIs were mixed, as the vital services sector came in slightly better than forecast, while manufacturing dipped slightly.
Looking ahead, economists at ING are gearing up for what they expect to be a stellar third-quarter GDP figure next week. Based on supercharged unemployment benefits, the investment bank is anticipating a record reading for the U.S. economy:
The key data release will be 3Q GDP growth and we expect it to be a record 34.5% annualised growth thanks to consumer spending rebounding on pent up demand after lockdowns and the support for household incomes coming from increased unemployment benefits, which saw upwards of 70% of recipients receive higher incomes than when they were actually working.
The issue for the Dow bulls is whether this positive momentum can continue. With consumer spending still showing signs of plateauing, the fourth quarter is undoubtedly a source of great uncertainty for Wall Street. With U.S. coronavirus cases surging close to record daily highs again , risks of further lockdowns are on the rise.
Stalled stimulus negotiations are another source of volatility. Though Nancy Pelosi and Steve Mnuchin have seemingly been making progress, the latest headlines suggested things are at a standstill once again.
Watch the video below for Mnuchin’s most recent comments:
The final presidential debate was completed last night, with both candidates providing a decent snapshot of their policies in a more structured environment. Unfortunately for Trump, polling suggests he needed a game-changing performance, and this was not the case against an elusive but well-rehearsed Joe Biden.
Watch the video below for some expert insight into the debate.
A few of Trump’s punches hit home, particularly when he cornered Biden over energy and fracking (a key consideration in swing state Pennsylvania). Still, Biden held his ground and handled the president’s accusations safely for a frontrunner. After the event, the stability in the Dow Jones clearly outlined the lack of revelations on the night, as markets reacted far more strongly after the initial, more chaotic confrontation.
It was a relatively calm day for the Dow 30 , except for Intel stock, which plummeted as much as 12% after its earnings release disappointed. The good news for the Dow Jones was that Intel is just the 26th heaviest weighted stock in the index, so its struggles didn’t cause too much damage.
Watch the video below for Jim Cramer’s take on the headwinds facing Intel:
Coca-Cola was another Dow member with a recent earnings report, and it fell just 0.2% despite its revenue being down some 9%.
American Express was down 3%, though the Dow’s heaviest weighted stock, UnitedHealth, rose 1%.