U.S. Stock Market Set To Digest The Record Initial Jobless Claims Data

U.S. Initial Jobless Claims Show A Record 6.6 Million Unemployment Benefit Applications

Last week, the market was shocked by the Initial Jobless Claims release which showed as much as 3.3 million applications for unemployment benefits. However, this shock was soon absorbed by the bulls, and the S&P 500 finished the day with a healthy gain.

Today, the market is set for another major test. The Initial Jobless Claims data, which has been just released, showed that 6.6 million Americans applied for unemployment benefits.

The analyst consensus called for 3.5 million. Before the release, Goldman Sachs increased its estimate to 6 million. The actual release showed even worse numbers than the gloomy Goldman Sachs forecast.

Literally everybody expected to see record numbers as coronavirus related measures hit the economy hard. The only question was the size of the blow. Currently, the Initial Jobless Claims data points a picture of a massive surge in unemployment.

Traders and investors should keep in mind that the current coronavirus-related measures are set to stay in place until the end of April. Today, it’s April 2, so there’s a full month to go. There’s a big chance that the data will continue to get worse week after week.

Will The Market Shrug Off The Negative Data Again?

The key question for traders and investors is whether the poor data is already priced in. As I wrote above, the previous Initial Jobless Claims release was also highly disappointing, but the market was able to shrug it off.

In my opinion, it will be harder to do the same trick this time. The situation with coronavirus in the U.S. continues to worsen. At the time of writing, data from Johns Hopkins University showed a total of 216,722 cases in the U.S.

S&P 500 futures, which were trading in the green zone before the release, are already indicating a flat open, although the situation changes very fast.

Today’s trading session will be very important for the evaluation of the general mood of market participants. Objectively, Initial Jobless Claims numbers indicate a huge blow to the economy.

If the market can show healthy gains after such news, it has a lot of optimistic bulls to back any upside move. If not, we will probably see more losses in the coming days as investors will get worried about the real-life impact of virus containment measures.