D.he Wall Street has shifted back into reverse after two consecutive days of profit. Technology stocks, which are considered to be very cyclical, came under pressure on Friday. Stockbrokers referred to President Donald Trump’s corona infection as a burden. In addition, the labor market report for September showed surprisingly low job growth, which also depressed the mood.
The leading American index, the Dow Jones Industrial, was mostly in the red and ended up being 0.48 percent lower at 27,682.81 points. On a weekly basis, this results in an increase of 1.87 percent. The market-wide S&P 500 lost 0.96 percent on Friday to 3348.42 points.
“Big shock” for investors
The technology-heavy Nasdaq 100 fell by 2.83 percent to 11,255.69 points. The recently seen enormous outperformance of tech stocks, which are part of the so-called growth stocks and also the so-called momentum stocks (i.e. stocks with recently high price dynamics), have aroused covetousness among many investors, wrote the experts at Quirin Privatbank. In her opinion, technology stocks remain generally promising, but on the other hand they have already anticipated a lot of positive things in current prices.
The president of the world’s largest economy is now showing slight symptoms of illness after being infected with the coronavirus. If Trump cannot exercise his official duties, Vice President Mike Pence would have to step in.
With regard to Trump’s corona infection, a market watcher spoke of a “great shock”, which naturally reduces investors’ willingness to take risks. The presidential election will take place in just over a month. Because of his quarantine, Trump is now missing out on election campaign events in three important contested US states, with Florida being particularly important, added market strategist Stephen Innes from the trading house Axitrader.
Labor market report also unsettles
In addition, the latest job report for America was cited as a drag on the stock market. The labor market continued to recover from its severe slump in the Corona crisis in September. Unemployment fell significantly and employment continued to rise. Wages also increased somewhat. The bottom line, however, is that the government’s monthly labor market report points to a slowing pace of recovery.
“In the past five months, just half of the jobs lost in the wake of the corona pandemic have been rebuilt,” wrote Thomas Gitzel, chief economist at VP Bank. Measured against this, the economic record looks “devastating” for the American president. “The slow job creation could endanger the re-election of Donald Trump.”
In the weak environment, Tesla’s shares fell by more than seven percent after two profitable days, bottoming out on the Nasdaq 100. The electric car maker had brought more vehicles to customers in the third quarter than expected by the market. According to analyst Joseph Spak from the analysis house RBC, the sales figures could raise some questions. Tesla is expanding its capacities even though the factories are not being used to full capacity. According to stockbrokers, Tesla was unable to dispel demand concerns or doubts about the implementation of long-term corporate goals.
In the Dow, Walmart stocks were among the biggest losers, down 1.8 percent. The retail group wants to sell a large part of its stake in the grocer Asda in Great Britain to investors, but expects a loss in connection with the business in the coming year.
The last time the euro was quoted at 1.1715 dollars. The European Central Bank had set the reference rate at 1.1730 (Thursday: 1.1752) dollars. The dollar cost 0.8525 (0.8509) euros. American government bonds fell somewhat. The futures contract for ten-year Treasuries (T-Note-Future) lost 0.1 percent to 139.40 points. The ten-year bond yield was 0.696 percent.