Wall Street investors dumped tech stocks in a mass sell-off following November’s disappointing jobs report. There were losses of between 1-2% on the Dow Jones, NASDAQ and S&P 500 indices, but it was technology stocks that were hardest hit. This came in a tumultuous week of trading as investors struggled to predict how the Omicron Covid-19 variant would affect the recovery of the US economy.
The hardest hit tech stocks included the electric car manufacturer Tesla that saw its stock price fall by over 6%. The Zoom Video brand had its stock fall just over 4% and DocuSign’s stocks tanked by 42% after its fourth-quarter financial report was much worse than investors had anticipated.
But it wasn’t just tech that was affected by the market jitters. Many companies working in the travel and hospitality sectors saw millions wiped from their value. Key among these was Las Vegas Sands whose stock fell by just under 4%, and everyone from Delta Airlines to Norwegian Cruise Line were also badly affected.
While the November jobs report was fairly gloomy, it is the spectre of the new Covid variant that will have the guiding hand in how the markets make it through winter. Although the US economy was looking to have turned a corner after the ravages of the Delta variant, it seems as though the markets will have more trouble ahead.
How bad was the jobs report?
While November’s jobs report offered a glimmer of hope, the overall picture was not as good as investors were wishing for. 210,000 non-farm new positions were created last month which was not even half the expected figure.
Thankfully the unemployment figures were marginally better than anticipated, following the pattern set by October’s jobs report. However, many economists have stated that the official unemployment rate doesn’t accurately report the true number of unemployed in the US.
With an increase in new jobs and a significant drop in unemployment figures, there were hopes that such a positive picture would boost the markets. However, the overall pace of recovery was enough to cause a sell-off in many stocks as some fear that the jobs market could soon reach saturation point.
It’s also a crunch time for investors with the Federal Reserve expected to make a decision about whether to end bond purchases earlier than originally planned. The US treasury yields showed a mixed reaction to the November jobs report, and Fed Chairman Jerome Powell is on course to shape new monetary policies in the coming days.
Elsewhere the financial picture is looking bleak. The Omicron variant has so far been found in five US states, and if it’s as transmissible as many scientists expect, there could be real problems ahead. Plus with the ongoing uncertainty regarding inflation and the continued supply chain crisis, it is starting to look like a bleak winter lies ahead.