October 30, 2020
U.S. equity markets rebounded yesterday from a disastrous first three days of the week. The Dow gained 139.16 points, or +0.52%, while the S&P 500 was up 39.08 points, or +1.19%. The NASDAQ, amidst “big tech” executives testifying in front of the Senate, rallied 180.72 points, or +1.64%. The Dow is down 5.9% week to date, on its worst pace since March 20. The S&P 500 has fallen 4.5% this week, headed for its worst week since June 12.
Stocks are on track for their worst week and month since March, following a sharp selloff in big technology. Volatility has dominated the markets this week, prompted by concerns over the election next Tuesday, a surge on COVID infections in the U.S. and worries that the economic recovery will not continue.
“Markets are concerned that we are replaying February and March,” said Chris Beauchamp, chief market analyst at IG Group. “It probably still isn’t in that category yet, but it’s heading in the wrong direction.
On a positive note, consumer spending increased more than expected in September. Consumer spending, which accounts for more than two thirds of U.S. economic activity, rose 1.4% last month after gaining 1% in August. Economists polled by Reuters had forecasted that consumer spending would rise only 1% in September. Earlier this week, 3rd quarter GDP and unemployment reports also exceeded analysts’ expectations.