Major indexes declined on Friday. Investors contemplated economic figures that highlighted the massive devastation caused by the pandemic. While some numbers have improved after the reopening, the recent surge of new cases shows that the economic rebound will most likely take more time than anticipated.
Federal Reserve Chairman Jerome Powell noted on Wednesday that according to signs, the increase in virus cases is starting to weigh on activity. He thinks that the path forward for the economy is very uncertain.
On Friday, the S&P 500 tumbled down by 0.4%, while the Stoxx Europe 600 Index plunged by 2.2%. On the other hand, the MSCI Asia Pacific Index lowered only by 0.1%.
“The stock markets are in that uncertain time between the hopeful third-quarter recovery and worries about the reopening process and what the rebound looks like. Thus everyone is waiting for things to play out” – stated Tom Garretson, the senior portfolio strategist for RBC Wealth Management.
Tech stocks skyrocketed during the last session
Despite the overall bearish market, several big tech companies rallied on Friday. Amazon.com Inc., Facebook Inc., Apple Inc., and Alphabet Inc. soared in extended trading.
On Thursday, equities plummeted down as data showed that the U.S. economy had its sharpest contraction on record. Besides, the number of Americans filing for unemployment benefits surged forward.
However, on Friday, United Parcel Service Inc. jumped to a record high, surpassing analysts’ estimates. Procter & Gamble Co.’s sales increased as well amidst high demand for detergent. And Qualcomm Inc. gained on a strong sales forecast.
The Nasdaq 100 may beat the S&P 500 for a 10th consecutive month. However, much of the good news has already priced into stock markets, and traders are looking for catalysts that could sustain further momentum in equities.
On the other side, giant tech companies have fared better during the pandemic recession thanks to their solid balance sheets, along with a suite of products that benefit from social distancing.
