- The Dow Jones dropped over 400 points Friday.
- U.S. stocks plummeted after earnings season crushed big tech.
- Nadex believes Dow bulls should be backing Donald Trump.
The Dow Jones dropped again on Friday, as earnings crushed Apple and Boeing stock. Election jitters are on the rise, with some investors starting to question how market-friendly a Joe Biden presidency would really be.
Dow Jones Falls as Big Tech Crumbles Post-Earnings
All three major U.S. stock market indices were in the red on Friday, with the Nasdaq declining 3% and the S&P 500 falling 2%. The Dow was the best-performing index, though it too was down over 400 points.
In economic data, Michigan consumer sentiment and core PCE were on deck. Consumer sentiment demonstrated a slight improvement from last month, while PCE (the Fed’s preferred inflation indicator) undershot forecasts at 1.5% annually.
While it was ultimately a big tech bloodbath that crushed the U.S. stock market on Friday, a lack of fiscal stimulus and surging coronavirus cases continue to weigh. A new all-time high in daily cases demonstrates that a “third wave” is building. With hospitalizations on the rise, investors are worried about another wave of lockdowns.
Watch the video below for the latest on the pandemic in the United States.
A recent NPR article indicated that cities like Tampa, Birmingham, and New York are running out of intensive care capacity due to the rise in hospitalizations.
Nadex: Trump May Still Be the Market-Friendly Candidate
The U.S. presidential election continues to grind closer, with investors continuing to debate the impact of a Trump or Biden victory. In the battle of lower taxes and more disruption (Trump) versus higher taxes and better global trade conditions (Biden), the majority on Wall Street are favoring a Democratic sweep as the most market-friendly outcome. With the fiscal tap turned on, Dow bulls would relish the chance for more Covid-19 relief money.
Watch the video below for the latest on election polling.
In a contrary take, Travis McGhee, Chief Commercial Officer at Nadex, believes a Trump victory is the most likely outcome. He told CCN.com:
President Trump believes in lower taxes and less regulation. Joe Biden believes in higher taxes and more regulation. Generally, markets like the S&P 500 and the Dow – that is, the broader equity indices – love a lower tax, lower regulation environment. So if Joe Biden were to win, these markets could move lower. If President Trump were to win, these markets could move higher.
Dow 30 Stocks: Apple and Boeing Crushed Post Earnings
It was another rough day in the Dow 30, as significant losses were seen after Thursday’s earnings deluge. Apple fell a whopping 6% after it reported better than expected profits, with investors seemingly punishing APPL stock for a decline in iPhone sales.
Watch the video below for Jim Cramer’s take on which tech giants to buy and which to sell after earnings.
Another Dow member reeling following a better than forecast earnings report was Boeing, which fell 4%. The company continues to burn cash at an alarming rate as debt continues to pile up for the embattled aerospace giant.
Bucking the negative trend, IBM managed to rise 2%, as the company announced it was raising its quarterly dividend. Caterpillar Inc. was the only other Dow stock spending much time in the green, with a 0.3% gain.