Market Update: Thu, Oct 29, 2020 | LPL Financial Research

Daily Insights

Stocks were lower Wednesday, October 28—historically the best day of the year for the stock market—as the latest COVID-19 outbreak and election uncertainty weighed. Today market participants will take cues from the GDP report, jobless claims, and earnings reports from some of the biggest names in tech.

  • US stocks opened little changed after the spike in US GDP.
  • European stocks are lower in midday trading amid renewed virus restrictions.
  • The European Central Bank hinted more stimulus may be coming in December.
  • Asian markets closed mostly lower.
  • The Bank of Japan cut its GDP growth forecast for 2020 to -5.5% from -4.7%, but raised its 2021 forecast slightly to +3.6%.

Jobless claims beat

The continuing decline in jobless claims is welcome as COVID-19 cases in the United States and around the world have continued to climb in recent weeks.

  • 751,000 Americans filed for unemployment last week, less than Bloomberg expectations of 770,000.
  • Unemployment filings fell for the third consecutive week.
  • Continuing claims for unemployment declined to 7.75 million, beating Bloomberg consensus for 7.77 million.

Global trade storms back

Global trade volumes have risen solidly, reflecting the strength of the global economic recovery and suggesting the global recession probably ended this summer. According to data from the CPB Netherlands Bureau, world trade volumes rose by 2.5% in August, adding to the 7.8% and 5% increases in June and July, leaving trade volumes just 3.5% below their December 2019 level. Retail sales have been a big part of the global recovery story.

Vaccine news

Regeneron said data from a late-stage clinical trial suggests that its antibody cocktail therapy significantly reduces virus levels and the need for further medical care. Dr. Anthony Fauci said he expects a vaccine to be available in January at the earliest.

Technicals update

Stocks are near flat in early trading following the largest daily loss for the S&P 500 Index since June. The index closed at 3271 and has key support at the September low point of 3209. Despite the risk-off move, Treasury yields were higher on the day, and tech stocks underperformed, a sharp contrast to the bear market that began in February.

COVID-19 news

New US COVID-19 cases rose 37% compared with the prior week, while the seven-day average jumped 24% to over 73,000, the 20th straight day with a double-digit increase  (source: COVID Tracking Project). Hospitalizations continue to rise steadily at near 2,500 per day. Cases in France, Germany, and Spain set fresh record daily highs.



This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data are from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use – Tracking 1-05073065