Stocks were mixed with the major indices down Thursday even as jobless claims beat estimates handily. Some economically-sensitive sectors were up.
The S&P 500 fell 0.75%, dragged down further by the components of the tech-heavy Nasdaq, which fell 1.9%. The 10-Year Treasury yield fell to 0.64%, as the rate continues to be pressured and under the recent rate of inflation, even though the Federal Reserve’s new policy is highly inflationary.
FAANG stocks and other big tech names were selling off, restricting the S&P 500 from churning out a gain. Facebook (FB) - Get Report fell 1.6% after it said it will prohibit new political advertisements for the week leading up to the election. Facebook shares were likely falling as a result of the broader tech sell-off, while one week’s worth of political ad revenue is almost immaterial.
Value stocks, across both cyclical and defensive sectors were mixed, although the very economically sensitive airlines were up about 4% and banks were up almost 2%. The Vanguard S&P 500 Value ETF (VOOV) - Get Report scratched out a gain of 0.6%. This comes as jobless claims for the past week were only 880,000, less than economists' estimates of 940,000. This data point, alongside many in August, is one that would point to continued sharpness in the recovery.
In the past several days, stocks across sectors have been rising on days when indications for the near future points towards a slowing rate of economic recovery. In that time, President Trump has been rising in the election polls. Trump promises what strategists see as incrementally positive policies for corporations and consumers, mostly through slightly lowered taxes.
Biden poses the opposite, although his heavy tilt towards general fiscal stimulus has prompted one strategist at UBS to say a Biden presidency, even with a blue wave in Congress, would not necessarily be a substantial negative for the market. In any event, the percentage point differential between the two in the polls widened to 7.2 from just above 6, in favor of Biden Thursday. This may have been holding back sentiment in the sectors that suffered Thursday, as increased corporate taxes are a negative for any U.S.-focused company.