Market snapshot: UK jobless rate jumps, so do US tech stocks

There's no stopping the US tech sector, but a rise in UK unemployment is a sign of things to come.

US tech shares have again taken up the mantle of market leaders, as another strong showing defied the current impasse on stimulus negotiations.

Among the best performing stocks were Apple (NASDAQ:AAPL), ahead of an event at which it is expected to unveil its latest iPhone and Amazon.com (NASDAQ:AMZN), whose Prime Day digital sale begins today. 

More broadly, investor attention is now turning to a third-quarter reporting season which is again expected to show a sharp decline in earnings, although significantly better than the second quarter, which encapsulated the peak of the pandemic lockdown. With the remainder of the year delicately balanced as the US economic recovery potentially loses some steam, the outlook comments from corporate boardrooms for the fourth quarter will take on additional significance.

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The main indices are all now in positive territory and building on recent gains, with the Dow Jones up by 1.1% and the S&P 500 ahead by 9.4% in the year to date. The latest surge in tech shares means that the Nasdaq index has risen by an astounding 32.3% in 2020.

There were further mixed messages in the UK ahead of what is likely to be a difficult end to the year. There was some evidence of a recent improvement in consumer spending, an important constituent of the economy, although it has been suggested that some of this may have been as a result of customers stockpiling ahead of Christmas in the face of further lockdown measures. Less positively, unemployment edged ahead to 4.5%  in the three months to August compared to 4.1% previously, and was worse than the expected level of 4.3%. 

With the new localised measures coming into force, but with less government support than previously, the figure will almost certainly deteriorate in the coming months as many will be forced to batten down the hatches.

The general investment malaise towards the FTSE 100 index has meant that the index has again missed out on the latest improvement in sentiment overseas. The index remains down by 20% in the year to date, with the increasing likelihood that 2020 may well become a year best forgotten.