U.S. Stocks Mixed After The Initial Jobless Claims Report

U.S. Initial Jobless Claims Report Shows That 4.4 Million Americans Filed For Unemployment Benefits

The eagerly awaited U.S. Initial Jobless Claims report has just been released, and it showed that 4.4 million of new claims were filed compared to the analyst consensus of 4.2 million.

Since the beginning of the crisis, the economy has lost almost 26.5 million jobs. This is a hit of an unprecedented scale.

The good news is that Continuing Jobless Claims were a bit better than expected at 16 million compared to consensus of 16.5 million. However, it’s worth noting that Continuing Jobless Claims data is lagging Initial Jobless Claims data by one week.

Following the report, the S&P 500 futures are showing minor gains in premarket trading. As usual during the current crisis, the situation may change very fast, so investors and traders should prepare for another day of increased volatility.

Oil Continues To Rebound

WTI oil prices continue their upside move as the market recovers from the recent shock when the May 2020 contract declined into the negative territory.

There’s no clear catalyst for the move, although renewed tensions between U.S. and Iran may have served as a positive factor for oil.

In my opinion, oil is pushed to the upside by speculative investors and traders who want to scoop up cheap oil contracts after the unprecedented downside moves.

The situation in the physical oil market is still unclear, and it remains to be seen whether the recent oil production cut deal will help deal with the oil storage problem.

Equinor Cuts Dividend, Other Oil Majors In Spotlight

The Norwegian major oil company Equinor has decided to cut its dividend by 67%. Traditionally, major oil companies treated their dividends as sacred cows. They were ready to cut costs, cut investment or stop share buybacks, but the dividends were kept in place.

It remains to be seen whether Equinor’s decision will lead to a wave of selling in other major oil names like Exxon Mobil, Chevron, BP, Royal Dutch Shell, Total. Even if they do not cut their dividends during this earnings season, the market may start discounting such a possibility in the future.

A sell-off in major oil names will certainly put pressure on the general market so even those investors and traders who do not have positions in the oil space should watch the above-mentioned stocks for a few days to see whether they manage to hold near their current levels.