US Stock Market Overview – The Fed Comes to the Rescue!Jobless claims surge wiping out 10% of the US workforce
US stocks moved higher on Thursday on the last day of a holiday-shortened week. The S&P 500 index finished the week up more than 12% with Thursday’s 1.45% gain capping off one of the best weeks since the financial crisis. It is unclear if this is a bear market rally or the bigging of a bull market. It will also depend on how long the US economy needs to sit on the sidelines. Thursday kicked off with another 6.6-million initial jobless claims print, which was immediately followed by a new Fed program which easily overshadowed the horrible job numbers. All sectors in the S&P 500 index were higher led by a rebound in real-estate, financial also contributed to the robust rally. Energy was the worst-performing sector. US yields moved lower following the jobless claims report, which weighed on the greenback. Oil prices whipsawed initially moving higher ahead of the OPEC+ meeting but slumped into the close as traders were leery of holding long positions.
Jobless Claims Surge
US jobless claims surged more than expected due to the coronavirus shutdown, with 6.6 million Americans filing first-time unemployment claims last week, according to the Labor Department. That pushed total claims over the past three weeks to more than 16 million. The U.S. has lost 10% of the workforce in three weeks. The most recent jobless number represents a decline of 261,000 from the previous week, which was revised up by 219,000 to nearly 6.9 million.
The Fed to the Rescue
Immediately after the jobless claims report was released, the Federal Reserve announced plans to inject another $2.3 trillion into businesses and revenue-pinched governments. This announcement buoys riskier assets, helping to push stocks higher. The Fed has given the market confidence that they will do whatever it takes to get the US economy back on track. The Fed has acted quickly and swiftly, and the economy is poised to take off once the all-clear is provided.