Even after Friday’s slump, the Dow and the S&P 500 are still on track to gain around 7% this week – the best since June. The Nasdaq has gained more than 8% in the past five days.
Another package of financial support is clearly needed as the unemployment rate, although significantly reduced last month, remains as high as 6.9%. This is down from 7.9% in September – but has risen sharply from 3.5% in February before Covid-19 put the US economy in a virtual stalemate.
The government reported its latest job figures on Friday morning and said 638,000 jobs were added last month – more than expected.
In other words, the old “deadlock is good for Wall Street”; story is still alive and well.
Timothy Chubb, Girard’s chief investment officer, said: “The market tried to half-price in a green wave.
“But if we have a divided Congress and potential President-elect Biden can’t continue with more substantial health and tax reform, the market will eventually see that as one thing. positive, “added Chubb.