- The Dow Jones lost more than 300 points on Friday.
- A positive jobs report did little to boost the sour mood on Wall Street
- ING fears the economic recovery may have plateaued in the United States.
The Dow Jones fell on Friday, as its three most heavily weighted stocks–Home Depot, UnitedHealth, and Salesforce–all came under pressure. A strong jobs report did little to boost the U.S. stock market as Wall Street worries about Biden’s tax plan, while SoftBank’s risky tech bet was exposed.
Dow Jones Falls Despite Solid Jobs Report
Among the major U.S. stock market indices, the Nasdaq was once again the weakest performer with a 3% decline. The S&P 500 fell 1.7% and the Dow declined 1.2%.
Economic data have been improving steadily, and Friday was no different. Unemployment fell more than forecast, dropping to 8.4% from 10.2%. Average hourly earnings ticked up, and the headline non-farm payrolls number hit expectations. Watch the video below.
Reading more deeply into the figures, James Knightley at ING believes there is clear evidence that the labor market has plateaued. Focusing on a myriad of indicators, U.S. consumption is leveling off, and that could be bad news for the V-shaped recovery:
We see a plateauing in the jobs market with the risk that faced with tough seasonal adjustment factors, we could see a negative payrolls number at some point, underlining the case for additional fiscal stimulus and the need for good news on a Covid vaccine. This levelling off at lower levels than in March can also be seen in credit and debit card transactions, hotel occupancy rates, TSA security check numbers and restaurant bookings, which only re-affirms our view that this recovery will not be V-shaped.
Wall Street Worries About Biden’s Tax Plan, Monster SoftBank Trade
The 2020 presidential election has never been more in focus than it is right now for Wall Street. Polling continues to favor Joe Biden on a national scale but battleground polling is proving to be far more competitive.
Many analysts are theorizing on social media that Joe Biden’s tax plan could be Wall Street’s biggest worry.
An alternative take to the source of the volatility has been the discovery of a massive speculative position from Japan’s SoftBank. An implosion of bullish options trades could have been the catalyst for the worst of the selling we have seen in the last few days.
Dow 30 Stocks: Salesforce Continues to Struggle, Apple Falls
Another difficult day for the Dow 30 saw plenty of red, though the losses were more moderate than Wednesday. Watch the video below.
It continues to be an extremely difficult start to Salesforce’s entry into the Dow Jones. The software company was the weakest performer with a miserable 5.6% decline. Apple and Microsoft continue to come under pressure, as MSFT lost 3%, and APPL recovered to just a 2.5% decline.
The two most heavily weighted stocks in the Dow are UnitedHealth and Home Depot, and both fell more than 2%. It was not all bad news for Dow bulls as Boeing, Travelers, JPMorgan Chase, and Caterpillar all rose more than 1%.