The hopes for the approval of a new stimulus package in the US supported optimism in the market on Monday ahead of the start of corporate reporting season.
The market rallied significantly with Apple (AAPL; + 6.28%), which scheduled its new iPhones on Tuesday, and Amazon.com (AMZN, + 4.78%), which kicked off its annual Prime Day Fall Sale. at midnight, were the main drivers of market growth, followed by other popular stocks such as Alphabet (GOOG), Microsoft (MSFT), Facebook (FB) and NVIDIA (NVDA).
The next day trading ended in a moderate decline after House Speaker Nancy Pelosi refused to support President Donald Trump's latest bailout proposal and the announcement of the suspension of vaccine trials by Johnson & Johnson (JNJ). The news of an "unexplained illness" in one of the participants in the COVID-19 vaccine trial and the subsequent suspension of the last phase of tests came as an unpleasant surprise for market participants. JNJ shares fell 2.29%. Investors also analyzed the Labor Department report, which showed that the CPI rose 0.2% in September after rising 0.4% in August.
The decline continued on Wednesday, the main reason being the lack of progress in negotiations on a new stimulus package. House Representative Speaker Nancy Pelosi said on Twitter that Speaker and Treasury Secretary Stephen Mnuchin spent nearly an hour on Wednesday morning discussing the stimulus proposal that appeared over the weekend, and the conversation was "productive." One of the main reasons for the controversy continues to be that the White House does not understand the need for a national strategic testing plan, the spokesman said. In turn, Mnuchin said they continue to make progress on the stimulus negotiations, but on some issues, both sides still have serious differences.
The next day the market was again in the red zone. An unexpected rise in weekly jobless claims in the United States heightened fears of a slowdown in the US economic recovery, while the prospects for legislators to approve a new stimulus package remained unclear. A Labor Department report showed that US state jobless claims rose unexpectedly last week, with more Americans switching to longer-term bailouts, suggesting a recent slowdown in the pace of labor market recovery. According to the report, the number of initial claims for unemployment benefits rose to 898,000, up 53,000 from the 845,000 revised last week. Economists had expected the number of applications to fall to 825,000 from the 840,000 initially announced the previous week.
The week ended with a slight increase. Pfizer announced that it could apply for permission to use its COVID-19 vaccine in an emergency by the end of next month. Market participants drew attention to a Commerce Department report showing that retail sales jumped 1.9% in September after rising 0.6% in August. Economists forecasted 0.7% growth. Excluding autos, gasoline, building materials and catering, sales rose 1.4% after a downwardly revised 0.3% decline in August. In turn, a report published by the University of Michigan showed much larger than expected growth in consumer sentiment in the US in October. According to the report, the consumer sentiment index rose to 81.2 in October from a September final reading of 80.4. Economists expected the index to rise to 80.5.
