Wall Street's knee-jerk reaction was a sharp decline in stock futures, which were also awaiting the September Non-Farm Payroll report, released at 8:30 am.
September jobs came in at 661,000, well short of expectations of 859,000, with the unemployment rate dropping to 7.9%, which is largely a fiction, as very many formerly employed persons have now dropped off the official tallies.
Futures remain near session lows, with Dow futures off 340 points.
Thursday's results left much to be desired, as the Dow, after being up by 250 points in early trading, eventually slipped into negative territory and finished up a mere 35 points. The NASDAQ, however, closed near its highs of the day, gaining nearly 160 points.
What shook up markets on Thursday was the continued stalemate between Democrats and Republicans over a fresh stimulus bill. They're still about $600 billion apart, the Dems looking for a $2.2 trillion package while the Republicans have offered $1.6 trillion through Treasury Secretary Steven Mnuchin.
Included in both packages is bailout money for ailing airlines which had held off firings and layoffs until September 30 as per their agreement in the CARES Act. As of Thursday, United Airlines and American Airlines have begun laying off workers, though both companies agreed they could cancel the furloughs should the congress commit to a stimulus package.
For their part, Democrats in the House, led by Speaker Nancy Pelosi, passed a $2.2 trillion resolution late Thursday, but the Senate is unlikely to entertain the measure, considering it too expensive and full of wasteful spending.
It's worth noting that the federal government has entered a new fiscal year as of October 1. Starting it off with a big, gaping budget hole may not be the most desired circumstance, but the lawmakers may not be left with much choice. The longer they delay, the more workers the airlines will let go, and the effects of airline workers on the dole will have spillover effects into the general economy, gnawing away at any nascent recovery in the wake of the COVID crash.
Another ironic feature of the first Friday session of October is that Trump, so vilified by the press, is now causing market stress. The political ramifications of the president's illness are far-reaching, with the election less than five weeks ahead.
The Dow Jones Industrial Average was ahead by 642 points for the week as of Thursday's close. With poor employment figures, no new stimulus on the horizon, and the uncertainty surrounding President Trump's status, those gains could be scuttled in a week-ending selloff.
Stay tuned. Friday looks to be a wild ride.
At the Close, Thursday, October 1, 2020:
Dow: 27,816.90, +35.20 (+0.13%)
NASDAQ: 11,326.51, +159.01 (+1.42%)
S&P 500: 3,380.80, +17.80 (+0.53%)
NYSE: 12,726.84, +24.94 (+0.20%)
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