U.S. Stocks Set To Open Lower As Continuing Jobless Claims Jump To 17 MillionS&P 500 futures are losing ground in premarket trading as traders are worried about the spread of the virus and its impact on the U.S. job market.
Fed Promises To Support The Economy As Long As Necessary
Yesterday, S&P 500 gained more than 1% as the Fed promised to use all available tools to support the economic recovery.
At the same time, the Fed noted that current data was pointing to a slowdown in the pace of the recovery.
The Fed also stated that the speed of the recovery depended on progress on the coronavirus front.
Unfortunately, the U.S. and the world in general have so far failed to contain the disease, and some nations that have been successful in dealing with the first wave of the virus are now struggling to contain it.
It remains to be seen whether Fed’s support will be able to push stocks higher from current levels without notable progress on the virus front.
Traders are worried that Fed’s stimulus may not be sufficient enough to take stocks to higher levels, and S&P 500 futures are losing ground in premarket trading.
U.S. GDP Declines By 32.9% In The Second Quarter
On a quarter-over-quarter basis, the U.S. GDP shrank by as much as 32.9% in the second quarter. Analysts expected that GDP will decline by 34.1%.
The GDP report was a bit better than expected but still highlighted a huge blow to the U.S. economy which is not surprising since economic activity was hit hard by coronavirus-related restrictions.
The second-quarter economic data was generally better than expected, and it is possible that traders believed that the decline of GDP will be less than 30% so the current GDP Growth Rate report may be viewed as a disappointment.
Continuing Jobless Claims Increase To 17 Million
The Initial Jobless Claims report showed that 1.43 million Americans filed for unemployment benefits in a week. Analysts expected that Initial Jobless Claims would total 1.45 million.
Meanwhile, Continuing Jobless Claims were 17 million while the analyst consensus called for Continuing Jobless Claims of 16.2 million.
The sudden increase in Continuing Jobless Claims shows that more people who have lost their jobs failed to find new ones. This is a worrisome development that may put additional pressure on the market.
For a look at all of today’s economic events, check out our economic calendar.