November 28, 2020

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U.S. equities post mixed weekly results amid soaring COVID-19 cases

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New York, US | Xinhua | U.S. equities posted mixed results in the week as Wall Street was worried that the country’s soaring COVID-19 infections could cast a shadow on its economic recovery.

For the week ending Friday, the Dow declined 0.7 percent, and the S&P 500 fell 0.8 percent, while the Nasdaq eked out a gain of 0.2 percent.

The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly loss of 0.3 percent.

Wall Street experienced a volatile week as investors weighed the economic impact of surging COVID-19 cases while looking to vaccine news.

The United States logged a fresh record of 195,542 new cases on Friday, according to data compiled by Johns Hopkins University.

The country has reported more than 12 million cases in total with the death toll from the disease exceeding 255,000 as of Saturday afternoon.

“The economic recovery to date has been swift, but I think it’s fair to say it’s been losing steam — particularly as the pandemic worsens,” Mitch Zacks, CEO at Zacks Investment Management, said in a note on Saturday.

“We are likely entering a challenging phase of the rebound, where growth is likely to slow and job gains may be much more difficult to come by. The next two quarters may show an economic recovery that’s faltering, not strengthening,” he said.

U.S. drugmaker Pfizer and its German partner BioNTech said Wednesday that a final analysis of clinical-trial data showed their COVID-19 vaccine candidate was 95 percent effective.

On Monday, U.S. biotechnology company Moderna said its experimental vaccine candidate was 94.5 percent effective in preventing COVID-19.

The markets had rallied following encouraging vaccine news, but the gains waned as the week wore on.

Wall Street also focused on a disagreement between the U.S. Treasury Department and the Federal Reserve over the continuation of funding for some of the emergency programs established during the early days of the coronavirus crisis.

U.S. Treasury Secretary Steven Mnuchin on Thursday asked the Federal Reserve to end five emergency COVID-19 lending facilities and return 455 billion U.S. dollars of unused funds. However, the Fed wanted to continue all these emergency facilities.

Disappointing retail sales data and jobless claims numbers also weighed on the market.

U.S. retail sales increased 0.3 percent in October, following a downwardly revised 1.6 percent gain in September, the Department of Commerce reported on Tuesday. The median estimate in a Bloomberg survey of economists had forecast retail sales would gain 0.5 percent in October.

The less-than-expected growth in retail sales indicated that U.S. consumers are becoming more hesitant amid spiraling new coronavirus infections.

“COVID appears to have already slowed spending between September and October, and it will almost certainly slow further in November,” said Chris Low, chief economist at FHN Financial, adding “this winter will be a tough test for the economy.”

U.S. initial jobless claims, a rough way to measure layoffs, registered 742,000 in the week ending Nov. 14, an increase of 31,000 from the previous week’s revised level, the Department of Labor reported on Thursday. Analysts polled by Bloomberg had estimated the initial claims would decline to 700,000.

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Xinhua

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