Data reports released in the morning painted a mixed picture on the economy, which also added to the market’s sloshing around. One indicated the pace of layoffs across the country may have slowed last week, with the number of workers filing for unemployment benefits falling to 837,000 from 873,000. It’s a larger decline than economists expected, though the number remains incredibly high compared with before the pandemic.
“We’re certainly expecting the employment situation to slowly improve,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “Things seem to be moving in the right direction.”
But other reports showed that personal incomes weakened by more than expected and that growth in the country’s manufacturing sector fell short of forecasts.
Other warning signs are also looming for the economy, which has seen some slowdowns recently after the last round of stimulus approved by Congress expired. The Walt Disney Co. and other major companies have announced even more layoffs this week, and the clock is ticking on Washington to offer more support.
The CEO of American Airlines said that it would reverse the furloughs of 19,000 workers if Washington can reach a deal with $US25 billion ($34.8 billion) for airlines “over the next few days.” United Airlines told government leaders that it could also undo the furloughs of 13,000 workers. American Airlines climbed 1.8 per cent and United Airlines was up 0.6 per cent.
Rising and falling hopes for a deal on Capitol Hill sent stocks on a roller-coaster ride on Wednesday, much as they have over the last several weeks.
“The market, for lack of really anything else to trade off of, has responded to these headlines on the potential for stimulus,” Wren said.
Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi spoke for 90 minutes on Wednesday, and hopes for an agreement helped send the S&P 500 up as much as 1.7 per cent during the day. But after Pelosi said in the afternoon that they still had “areas where we are seeking further clarification,” the index gave up all but 0.1 per cent of its gain before resuming momentum at the end of the day.
The pair have worked effectively together in the past, and they helped drive through the previous economic rescue approved by Congress in March. But the country’s partisan divide has only deepened since then, which has stymied progress on aid that investors say is crucial for the economy. The election is only about a month away.
The yield on the 10-year Treasury fell to 0.67 per cent from 0.69 per cent from late Wednesday after giving up earlier gains.
In Asian markets, trading on the Tokyo Stock Exchange was suspended due to a technical failure in its computer systems.
The Tokyo Stock Exchange said it plans for normal trading to resume on Friday. Officials said trading was halted early Thursday because rebooting the huge system after the malfunction would have caused confusion.
TSE President Koichiro Miyahara repeatedly apologised for the disruption to trading on the world’s third largest exchange, where about 70 per cent of brokerage trading both by value and volume is by foreigners.
The outage on the exchange eclipsed Japan’s main economic news of the day, the first improvement in manufacturing sentiment in three years, despite the pandemic.
Trading in stock markets for South Korea, Hong Kong and mainland China was closed for national holidays.
In Europe, Germany’s DAX fell 0.2 per cent, and France’s CAC 40 rose 0.4 per cent. The FTSE 100 in London rose 0.2 per cent.
A Global Asset Management Seoul Korea Magazine