Major stock indexes on Wall Street traded mixed on Thursday, after three days of “rally”, which was largely due to the reassurance about the economic consequences of the appearance of the coronavirus’s Micron mutation.
On the dashboard, the industrial Dow Jones remained virtually unchanged, losing 0.06 points to 35,754.69 points, with the widest S&P 500 to “lose” 33.76 points or 0.72%, at 4,667.45, while the technological Nasdaq fell by 269.6 points or 1.71%, to 15,517.40.
A slight drop was considered expected after the gains of the previous sessions, after the euphoria for the developments around Covid-19, which do not seem to create structural changes on hand in the economic activity.
“We believe Covid is still at the heart of the investor’s narrative,” said Greg Bassuk, CEO of AXS Investments. “So we think investors are not just taking a breather, but a lot of eyes are on the economic data that is expected and the impact that it will have on the Fed moves,” he said.
Many of the leading equities in the travel industry, which led earnings earlier in the week, are down. Shares of Carnival and Norwegian Cruise Line lost about 1.6%. Shares of online travel booking companies such as Expedia and Booking also fell 1.5% and 1.7% respectively.
Shares of the airline also moved lower, with United losing 1.7% and American Airlines 0.4%, as the latter announced that it was reducing its scheduled flights. The reason is the delay in deliveries of new Dreamliner aircraft by Boeing, with the latter’s share also falling by 1.6%.
The moves on the board came a day before the announcement by the US Department of Labor of inflation data (consumer prices) in November. Economists surveyed by the Dow Jones Network expect the CPI to rise by 6.7% year-on-year. If confirmed, this would be the highest inflation since June 1982.
Officials at the US Federal Reserve are expected to react to high inflation by announcing next week the faster withdrawal of easing measures they have launched since the pandemic began.
It will initially double the amount of the Fed’s reduction in monthly asset purchases, with the taper reaching $ 30 billion. in monetary policy under Jerome Powell.
According to Bank Of America, although the coronavirus is here to stay, “its endemic phase, in which human infection will continue to exist, but deaths, lockdowns and travel restrictions will be rare, is approaching.” .
Ed Moya, a senior analyst at Oanda, said the market was expecting data on inflation and the impact it would have on the Fed’s monetary strategy.
Among the 30 Dow shares, 12 moved with positive signs and 18 with negative. The profits were led by those of Walgreens Boots Alliance, Walmart και Visa, while those losses of Intel, Boeing and Nike.
Macro
Initial U.S. jobless claims – in the week after Thanksgiving – fell to a 52-year low, reflecting the reluctance of companies to lay off workers amid the worst workforce shortages in decades.
In particular, initial applications fell by 43,000 to 184,000 in the week ending December 4, the country’s Labor Ministry announced on Thursday. The previous lowest level was at 182,000 in the week ending September 6, 1969. Estimates put the number at 211,000, according to a Dow Jones survey.
Although there are many vacancies, much of the decline seemed to be due to issues related to the holiday season. The government’s process of adapting applications to seasonal needs sometimes creates distortions during the holidays.
The actual number of applications, for example, rose sharply last week to close to 300,000.
Applications may fluctuate from Thanksgiving to New Year due to seasonal recruitment. Companies hire a lot of employees in the last months of the year and let them go after the holidays.
However, the number of people applying for benefits is still extremely low and is likely to decline further as the economy grows rapidly.
The companies do not want to lay off any employees except as a last resort, as they may not be able to find replacements. There are – almost a record – 11 million jobs, but not enough people to fill them.
Meanwhile, continuing claims for benefits have risen by 38,000 to 1.95 million and remain low at pre-pandemic levels.
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