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David Becker

US stocks were mixed on Thursday ahead of Friday’s jobs report. Expectations are for job losses to increase by 8-million and the unemployment rate to rise to 20%. This follows Wednesday’s ADP private payroll report which showed a smaller than expected decline. Sectors in the S&P 500 index were mixed, led down by Utilities and Healthcare, Financials bucked the trend. US yields moved higher, which weighed on the utility space and gave a boost to financials. US jobless claims came in higher than expected while the US Trade Gap widened more than anticipated. After declining for 4-straight trading session, the VIX volatility index bounced near the 200-day moving average. The ECB announced a new quantitative easing plan which helped buoy European shares.

US Jobless Claims Rise but are Decelerating.

US initial jobless claims rose 1.877 million last week compared to expectations that claims would rise by 1.77 million. The Labor Department’s total nevertheless represented a decline from the previous week’s upwardly revised total of 2.126 million. The decline below 2-million shows that the rise in jobless claims is decelerating. Filings under the Pandemic Unemployment Assistance program totaled 623,073. This was the first time the government’s weekly jobless claims report came under 2 million since the week ended March 14. Continuing claims, totaled 21.5 million, a gain of 649,000 over the past week, also worse than expected.

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US Trade Deficit Widened

The US trade deficit jumped 16.7% to $49.4 billion according to the Commerce Department. Expectations were for the trade gap increasing to $49.0 billion in April. Imports fell 13.7% in April from March, and exports dropped 20.5%, the largest declines since record-keeping began in 1992.

The ECB Pulls Out the Big Guns

The European Central Bank announced that it will increase its Pandemic Emergency Purchase Programme by 600 billion euros as it attempts to bolster the economy following the coronavirus crisis. The amount comes on top of 750 billion euros of government bond purchases the ECB announced in March, taking the total to 1.35 trillion euros.

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