U.S. Stocks Set To Open Lower After Another Disappointing Initial Jobless Claims ReportS&P 500 futures are losing ground during the premarket trading session amid fears that the recovery will not be as quick as the market expected.
Initial Jobless Claims Report Shows That 3 Million Americans Filed For Unemployment Benefits In A Week
The Initial Jobless Claims report has just been released, and it showed that 3 million Americans filed for unemployment benefits compared to analyst consensus which expected the report to show a figure of 2.5 million.
Meanwhile, Continuing Jobless Claims were better than expected at 22.8 million compared to consensus of 25.1 million. It should be noted that the Continuing Jobless Claims data lags the Initial Jobless Claims data by one week.
The previous number of Continuing Jobless Claims was 22.3 million so the continuous unemployment did not rise that much. Apparently, some people who have lost their jobs managed to find them in areas which were less hit by the coronavirus.
Both reports highlight the very challenging situation in the U.S. job market, and S&P 500 futures, which are down about 1% in premarket trading, are finally showing sensitivity to poor economic data.
IEA Report Helps Oil To Gain Some Ground
Recently, oil prices have shown some strength despite the material downside move in the equity market.
The International Energy Agency has just released its monthly report which revised the projected hit to oil demand in 2020 from 9.3 million barrels per day (bpd) to 8.6 million bpd.
However, it remains to be seen whether the recent stability on the oil price front can provide support for oil-related equities which have been declining together with the general market in the recent days.
The Market Is Worried That Coronavirus Will Continue To Impact Life For A Long Time
The World Health Organization stated that coronavirus may become endemic in human population just like HIV. According to the European Medicines Agency, a vaccine could be ready in about a year in an optimistic scenario.
This scenario is not that optimistic for the world economy since it signals that some virus containment measures will have to be implemented for many months to come.
Even the hard-hit nations are very far from developing herd immunity. According to the French Pasteur institute, just 4.4% of French citizens have been infected by the coronavirus. The institute stated that about 65% of the population should be immune to the virus to develop herd immunity.
In case the market starts pricing in the risks of a more challenging exit out of the pandemic, the stocks will have further room to fall from current levels.