'The crown jewel of data': Stocks slump as fears of jobless claims overpower relief at Senate passing $2 trillion stimulus bill
(Source: businessinsider.com)

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(Original link: businessinsider.com)

Michael Culhane, a trader in the S&P 500 stock index futures pit at the Chicago Board of Trade, watches price movement October 10, 2008 in Chicago, Illinois. Scott Olson/Getty Stocks slid on Thursday as worries about surging unemployment offset relief at the US Senate's approval of a $2 trillion anti-coronavirus stimulus package. Economists expect a surge in initial jobless claims to between 1 million and 4 million, up from 281,000 a week earlier. "This will be the first real measure of just how far and how fast the world's largest economy has contracted because of the coronavirus," one analyst said. The Senate passed a bill that would provide loans to airlines and other distressed industries, small businesses, state and local governments, healthcare providers, and households.
Global stocks slid on Thursday as concerns about a spike in jobless claims overpowered relief at the US Senate's approval of a $2 trillion stimulus package designed to combat the economic fallout from the novel coronavirus.
Wall Street economists predict unemployment filings last week — revealed at 8:30 a.m. ET today — rocketed to between 1 million and 4 million. That would mark a dramatic increase from 281,000 in the previous week, and dwarf the previous record of about 700,000, set in 1982.
That dire prospect tempered investors' enthusiasm about the Senate's unanimous passing of a bill that would provide loans to airlines and other struggling sectors, small businesses, state and local governments, healthcare providers, and households. Companies that accept bailouts would face a temporary ban on stock buybacks , limits on executive bonuses, and requirements for worker protections.
The House of Representatives is expected to vote on the legislation on Friday. If it passes, President Donald Trump could then sign it into law.
Commentators were focused on the initial jobless claims figure.
"This will be the first real measure of just how far and how fast the world's largest economy has contracted because of the coronavirus," Jasper Lawler, head of research at London Capital Group, said in a morning note.
"If we see a number above 2 million, markets will start clamoring for the next government or central bank bailout," he added.
If the "crown jewel of contemporary US economic data" delivers a reading north of 1.5 million, that would "point to a labour market collapse eclipsing anything experienced in 2008-09," Michael Every, global strategist at RaboResearch, said in a research note.
"The real catalyst for a real recovery is going to be beating the virus," he added.
Here's the market roundup as of 10:32 a.m. in London (6:32 a.m. in New York): European equities dropped, with Germany's DAX down 1.9%, Britain's FTSE 100 down 1.7%, and the Euro Stoxx 50 down 1.6%. Asian indexes slumped, with China's Shanghai Composite down 0.6%, Hong Kong's Hang Seng down 0.7%, and Japan's Nikkei down 4.5%. US stocks were set to open lower. Futures underlying the Dow Jones Industrial Average , the S&P 500 , and the Nasdaq fell by 0.5% to 0.8%. Oil prices retreated, with West Texas Intermediate down 2% at about $24 a barrel, and Brent crude down 1.5% at about $27. The benchmark 10-year Treasury yield retreated to around 0.81%. Gold was flat at $1,634. Bitcoin rose about 0.3% to about $6,610. Loading Something is loading.
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