Wall Street reverts to similar patterns experienced in the middle of October as the U.S. economy contracts for the second day in a row on Thursday. The Dow Jones Industrial Average posted a decrease of 4.85%, dropping 443 point for the day, totaling post-election losses over 8.8%. The S&P fell 5.03%, and shared its worst two consecutive day trading sessions since the 1987 crash with the Dow. The Nasdaq decreased 4.43% during market hours on Thursday.
A marginal increase in jobless claims might have helped move the markets lower today as this economic report confirmed an increase of 3,000 claims since last month. The nominal benefits value increased by $122,000 from last month, with a total of $3.84 million disbursed. Jobless claims have dipped to 25-year lows, and has not been seen since February 1983. Indicators like these depict a less-than-stellar holiday season this year, especially if these numbers keep heading south.
The Bank of England has established how dismal the current market conditions are and cut rates to levels unseen since 1955. European markets were given a reality check yesterday when major markets finished in the red for the first time in 7 trading days, the rate cut from 4.5% to 3.0% helped re-establish the bleak market outlook. The FTSE fell 5.70%, while Germany’s DAX tumbled 6.84% on news that factory orders in September fell by 8%. The CAC 40 also experienced a bearish day, and posted losses of 6.38%.
The Asian markets also returned to volatile trends experienced in the recent past, with the Nikkei plunging slightly over 6.5%. Hong Kong’s Hang Seng fell over 7%, and China meets with Taiwanese President for the most progressive talks in the past 60 years. On the day of the talks, the Straits Times fell 2.66%, as the $23 million Taiwanese citizens will decide the future of a relationship with China.
Toy maker Mattel (MAT: 14.52, -0.46 (-3.07%)) will be cutting 1,000 jobs around the world due to a grim outlook for the holiday season. The cuts will breakdown to approximately 3% of its work force, and 8% of its management staff. Mattel is coming of their best year last year and reported third quarter growth in sales by 6% in October.
Walt Disney (DIS: 22.81, -1.42 (-5.86%)) experienced a drop in net income by 13% in its fiscal fourth quarter this year. Disney beat revenue expectations, but missed earnings by $0.06, reporting earnings per share of $0.43.
That’s all for today, catch me tomorrow, same time, same place, for the Bullish Banker’s Daily Market Recap.
-Derek Stevens
Disclosure: The fund the author is associated holds a long position in DIS.
