Stock market’s volatile month weighed down by layoffs, no stimulus

Stocks were volatile on Friday as the market digested the overnight news of President Donald Trump and the first lady Melania Trump testing positive for the coronavirus.

© Joe Burbank, AP
Guests wear masks as required to attend the official reopening day of the Magic Kingdom at Walt Disney World in Lake Buena Vista, Fla., Saturday, July 11, 2020. Disney reopened two Florida parks, the Magic Kingdom and Animal Kingdom, Saturday, with limited capacity and safety protocols in place in response to the coronavirus pandemic.

The news adds another layer of uncertainty to a market already fraught with the unknown of an election four weeks away.

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“I think markets are overreacting to it to be quite honest, but it does increase uncertainty,” said Shawn Cruz, manager of trader strategy at TD Ameritrade. “It’s not the market thinking it’s bad, it’s the market not knowing what to think.”

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Brutal month

Prior to the Trump news, the market had finished off a brutal month of September on a relatively high note on Wednesday.

The Dow Jones Industrial Average, S&P 500 and Nasdaq all finished a down month of September with gains in four of the last five trading sessions of the month. Despite a disappointing September, the S&P 500 is still up more than 8.5% since the beginning of the third quarter.

Elsewhere, Democrats and Republicans once again failed to reach a compromise on another economic stimulus plan after a contentious first presidential debate between Trump and Democratic presidential nominee Joe Biden on Tuesday.

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Despite ongoing negotiations, U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were unable to reach an agreement on a stimulus package. Mnuchin reportedly proposed a $1.6 trillion deal on Wednesday, but House Democrats have drafted their own $2.2 trillion stimulus legislation.

With no stimulus bill imminent, major U.S. companies continued aggressive layoffs last week. Disney announced 28,000 theme park layoffs, Royal Dutch Shell announced at least 7,000 layoffs, Marathon Petroleum announced 2,050 layoffs, Dow said it is reducing its workforce by 6% and United and American Airlines furloughed a combined 32,000 workers.

On Friday, the Labor Department reported the U.S. economy added 661,000 jobs in the month of September, missing economist estimates of 800,000 new jobs.

Bed, Bath & Beyond earnings wow

Bed, Bath & Beyond shares gained more than 35% after the company reported 80% online revenue growth in the second quarter and generated its first quarter of positive same-store sales growth in nearly four years.

This week, investors will be closely monitoring earnings reports from Levi Strauss on Tuesday, RPM International on Wednesday and Domino’s Pizza on Thursday.

Analysts are expecting S&P 500 earnings to decline by 21.2% in the third quarter, according to FactSet.

Economic numbers to watch

Following the lackluster jobs report, investors will get key economic updates on Monday when Eurostat releases its Eurozone retail sales report for the month of August and on Wednesday when the U.S. Federal Reserve releases its latest meeting minutes.

Benzinga is a financial news and data company headquartered in Detroit.

This article originally appeared on Detroit Free Press: Stock market’s volatile month weighed down by layoffs, no stimulus