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U.S. stock market led by the Dow futures turned positive despite the negative data on jobless claims that shot to historic figures of more than 3 million. The number of jobless claims even surpassed the Great Recession peak of about 695,000.
During the early trading hours on Thursday, the U.S. stock futures led by the Dow Jones showed signs of recovering, despite the initial release of jobless claims that recorded the worst in recent history. As a result of the ongoing coronavirus, layoffs from major companies have become the order, which has led to a sharp uptick in unemployment in the United States.
Dow futures together with Nasdaq 100 slightly jumped higher, while the S&P 500 dropped to retest the previous day’s lows. However, at the time of writing, the S&P 500 was in the upward direction, headed to hit yesterday’s highs. In general, all three were up by approximately 2% as the bulls were showing signs of recovering from the free fall.
According to the Labor Department, the unemployment benefit claims soared up to 3.28 million in the past week. It was a record high that even surpassed the Great Recession peak of 695,000. The number is staggeringly huge that it wiped out all the gains president Trump had done in the past few years to deliver jobs to the Americans.
Regarding this, the Chief Information Officer at Independent Advisor Alliance Chris Zaccarelli said:
“It is awful to see and represent what professional investors have been talking about for the past week.”
On the brighter side of the staggering number, it was much lower than what Citi predicted, at 4 million.
What Next for U.S. Stock Market and the Dow Futures
The spike in the stock market can be attributed to the recent coronavirus stimulus package bill of $2 trillion, which the Senate unanimously approved. The package is meant to relieve the market from the coronavirus strains and offer the American citizens give away to support their livelihood. The bill is now awaiting the House of Representatives to pass it on Friday morning. There are push and pull on how the package is to be shared amongst the different stakeholders, with states like New York claiming to have been undervalued.
The stimulus package may be seen as a temporary relief to the problem in the bigger picture. Putting into perspective, coronavirus infection rates as per yesterday’s data still increased steadily in the United States. As the number of infected people surpassed 60,000, things are starting to look ugly in comparison to China which has in a way stabilized the virus.
According to Microsoft co-founder Bill Gates, the United States as a nation does not need the money at the moment but a quick closure and lockdown to control a further spread of the virus. If the stimulus package does not ignite the stock market further than it is at the moment, a deeper drop is staring at the major stocks, in an unprecedented manner.