The Dow Jones slipped again on Thursday. A quiet day of trade showed bulls struggling to lift the index higher. Another weak initial jobless claims release was little help to the Dow, as economists continue to stress that the unemployment situation is deeply concerning.
All three major U.S. stock market indices traded lower on Thursday. The best performing was the Nasdaq, with a 0.05% loss, while the S&P 500 and Dow Jones both slumped around 0.2%.
At some point, Wall Street may be forced to confront the employment fundamentals. For now, investors appear confident that large swathes of these job losses will be coming back. Whether they do is yet to be seen.
Economist James Knightley at ING sees plenty to be concerned about, as both the data and the Fed suggest that things are far from rosy:
Today’s numbers suggest that the reopening story may not be generating as much momentum for job creation as the surprise May payrolls number had suggested. It also tallies with comments yesterday from the Cleveland Fed’s Loretta Mester and Atlanta Fed’s Raphael Bostic. Mester implied firms are recalling workers more slowly than originally intended, and the initial deterioration was “even steeper” than official statistics implied.
Perhaps the most concerning fundamental for the jobs market is the surge in virus cases in states like Texas and Arizona.
A large portion of the lost jobs are in the service sector, and even before cases started picking up, there was evidence that restaurant bookings were sliding again.
Philadelphia Fed manufacturing comfortably beat forecasts , suggesting that some kind of rebound remains underway in the sector.
There was also some potentially good political news for stocks. The Trump administration appears to be doing its best to de-escalate tension with China.
Mike Pompeo claimed on Twitter that Beijing remains committed to the “Phase One Deal.” This is a claim that will be hotly debated.
While there were no big losers, it was a generally poor day for the Dow 30 as most of its members fell. Apple’s (NASDAQ:AAPL) incredible momentum finally slowed, as the tech giant hung around flat on the day.
Boeing (NYSE:BA) lost 0.5% on a rare day of low volatility for the aerospace giant. Goldman Sachs (NYSE:GS) fell 1% as yields remain near record lows.
Despite optimism for a vaccine , Pfizer (NYSE:PFE) continues to struggle, as the pharmaceutical giant lost 1%.