MARKET WATCH: Oct. 2

All three U.S. indexes climbed Wednesday to end the quarter on a strong note. Despite a stretch of volatility that stalled momentum in September, the S&P 500 and Dow gained 8.5% and 7.6%, respectively, over Q3. Both indexes are up more than 26% since the end of March, while the Nasdaq has risen 45% over the past six months, its biggest two-quarter gain since 2000.

All three major U.S. indexes jumped after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin both expressed hope for a breakthrough in partisan stimulus negotiations, but gains were pared later in the day after key Republicans dismissed the likelihood of anything passing before the U.S. election.

In Canada, the TSX lost 90 points on Wednesday, closing out Q3 with a 1.3% decline. Over the quarter, the health care sector was up more than 30%, while the materials, consumer discretionary and energy sectors were the weakest performers.

U.S. indexes edged slightly higher Thursday as investors continued assessing the prospects of Congress passing an additional stimulus package before next month’s election. In Canada, the TSX started off Q4 with a modest gain of 63 points.

N.A. Markets Bounce back

For the four trading days covered in this report, the Dow surged 643 points to close at 27,817, the S&P 500 was up 83 points to settle at 3,381, while the tech-heavy Nasdaq jumped 413 points to close at 11,326. In Canada, the TSX added 119 points to end at 16,184.

Strategy

U.S. unemployment rate declines further as labour force participation edges lower

The U.S. economy added fewer jobs than expected in September as many workers fell out of the workforce and tailwinds from the government’s census hiring rolled off. Nonfarm payrolls increased by 661,000 following an upwardly revised 1.49 million advance in August, according to data on Friday from the Labor Department, and falling short of consensus at 859,000.

The unemployment rate fell by more than forecast, dropping 0.5 percentage point to 7.9%, though the labor-force participation rate declined by 0.3 point to 61.4%, with declines particularly pronounced among women. T

he number of Americans classified as long-term unemployed jumped by 781,000 to 2.4 million in September. The category, which includes those actively searching for work for 27 weeks or more, underscores the lasting economic scars many Americans will have after months of joblessness. The average duration of unemployment is nearing an eight-year high at 20.7 weeks and the number of permanent job losses rose by 345,000 to 3.8 million, a seven-year high.

Across sectors, breadth was decent with employment in goods producing sectors up 93,000 and 784k in the services sector. Still, callback’s of furloughed workers continue to dominate the report and little, if any organic job growth is evident.

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MARKET WATCH: Oct. 2

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