U.S. Stocks Set To Open Lower As Traders Remain Worried About The Virus

U.S. Initial Jobless Claims Stay High At 1.5 Million

The U.S. has just provided new Initial Jobless Claims and Continuing Jobless Claims reports.

The Initial Jobless Claims report showed that 1.5 million Americans filed for unemployment benefits in a week, in line with the previous report. Analysts expected that Initial Jobless Claims will decline to 1.3 million.

The Continuing Jobless Claims report was better than expected as it showed that 19.5 million Americans were still receiving unemployment benefits. Analysts believed that the number will be close to 20 million. The decrease in Continuing Jobless Claims shows that some workers managed to find new jobs.

S&P 500 futures are losing ground after the release of employment reports as the employment situation remains challenging while the second wave of the virus is a real threat.

U.S. GDP Shrinks By 5% In The First Quarter

The first-quarter GDP Growth Rate was -5%, fully in line with analyst consensus.

Durable Goods Orders increased by 15.8% month-over-month in May compared to analyst consensus which called for growth of 10.9%. The rapid increase in Durable Goods Orders shows that the economy has immediately started to rebound once the lockdown measures were lifted.

The key question for the market right now is whether the U.S. will avoid a second series of lockdowns due to the surge in the number of new coronavirus cases in some states.

U.S. Dollar Shows That Markets Are Truly Worried About The Second Wave

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continues its rebound, trying to settle above 97.5. At the peak of recent market optimism, the U.S. Dollar Index was below 96.

During the current crisis, the American currency has served as a safe haven asset of last resort. Once the market got convinced that the Fed will solve all problems, the U.S. dollar started to decline.

The recent upside of the U.S. dollar shows that traders are indeed concerned about the potential second wave of coronavirus and are trying to protect themselves against a market sell-off.

Gold, which has recently managed to settle above the key resistance at $1750 per ounce, also highlights the nervous mood.

It remains to be seen whether the current downside will turn into panic due to problems on the coronavirus front, but traders should closely watch both the U.S. dollar and gold in order to evaluate the true level of market fear.

For a look at all of today’s economic events, check out our economic calendar.