Market Declines For Third Straight Session As Investor Sentiment Drops

Dimming hopes for another coronavirus relief bill ahead of the election and a slew of renewed lockdown measures in Europe sent equities backsliding on Thursday, marking the third consecutive session of losses. 

The Department of Labor’s (DOL) latest jobs report exasperated investor risk concerns and contribute to the day’s sell-off. Last week’s initial unemployment claims, which reached their highest point since the middle of August, were an unwelcome surprise for analysts, who took it as one more indication of the labor market’s slowing progress.

Almost 900,000 Americans sought unemployment insurance for the first time last week following announcements from several major employers of widespread layoffs amid the ongoing pandemic. Economists from UBS observed the claims — which hit a two-month peak — arise as the economy is moving “from hiring by companies with a future to firing by companies in structural decline.” 

Investors also kept their focus on the possibility of lawmakers reaching a compromise on a new stimulus package before the election, despite pessimistic remarks from Congressional leaders. During a Thursday interview with Fox Business, President Trump said he was prepared to expand his $1.8 trillion proposal, adding that “Nancy Pelosi doesn’t want to give anything,” despite the House already approving a $2.2 trillion package.

During an address at the Milken Institute Global Conference the previous day, Treasury Secretary Steven Mnuchin noted that “getting something done before the election and executing on that would be difficult, just given where we are in the level of details,” pointing to negotiations with Democrats. Mnuchin and House Speaker Pelosi have regularly discussed another deal and are scheduled to resume talks on Thursday.

Meanwhile, many countries and large cities in Europe levied tighter restrictions to control a recent rise in new COVID-19 cases. Beginning this weekend in London, indoor household gatherings will be limited, while in France, a nighttime curfew will go into effect this Saturday for nine cities, including Paris. 

Disappointing third-quarter corporate results — particularly from big banks — have further dampened investor sentiment this week. Wells Fargo’s earnings came in under half what it reported during last year’s third quarter, and Bank of America also revealed weak earnings, sales, and trading results. 

On the other hand, JPMorgan Chase and Citigroup reported better-than-expected third-quarter performances. Goldman Sachs doubled their year-over-year earnings from asset management profits and robust fixed-income trades.

Morgan Stanely, which released its quarterly report on Thursday, accompanied JPMorgan Chase in surprisingly strong results thanks to increased trading desk activity and a summertime runup that helped fuel trades.

In a statement, James Gorman, the bank’s CEO, said, “We delivered strong quarterly earnings as markets remained active through the summer months, and our balanced business model continued to deliver consistent, high returns. The completion of the E*TRADE acquisition, the subsequent ratings upgrade from Moody’s, and the recently announced acquisition of Eaton Vance significantly strengthen our Firm and position us well for future growth.”

Despite the mixed results, the majority of big bank leaders have voiced a similar sentiment: that the worst of the economic fallout from the pandemic is passed, but recovery is still a long road ahead.


  • McCormick, Emily. “Stock Market News Live Updates: Stock Futures Open Mixed after Second Day of Selling.” Yahoo! Finance, Yahoo!, 15 Oct. 2020,



Smart Updates

About Author