U.S. jobless claims skyrocket to over 3 million, markets rally regardless

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Recent data indicates that US jobless claims have doubled to more than 3 million from a previous forecast of over 1.5 million. Dow Futures meanwhile dropped to a 200-point opening after a 3-day rally.

On Thursday, CNBC’s Rick Santelli reported that there are about 3.28 million jobless claims. This report caused the US dollar to drop to a one-week low.

However, despite the massive amount of jobless claims, some analysts expect this move to have only a short-term downside effect on the economy.

Mark Hamrick, senior economic analyst at Bankrate said in a statement:

“This explosion of first-time claims for unemployment benefits, topping 3 million, demonstrates the toll unprecedented efforts to contain the deadly coronavirus outbreak take on the job market […] It is reasonable to expect that some, perhaps many, but not all, of these jobs, will come back once we venture back into public.”

Asian markets expressed optimism on Friday after some countries announced their respective multi-trillion dollar stimulus packages.

G20 leaders implement additional fiscal measures

G20 leaders have also shown their intentions of injecting over US$5 trillion into the global economy. In a statement released on Thursday, they said:

“The G20 is committed to do whatever it takes to overcome the pandemic […] Emergency measures aimed at protecting health will be targeted, proportionate, transparent, and temporary.”

The G20 leaders also sought help from the International Monetary Fund (IMF) and the World Bank Group in supporting other countries in need.

Reuters reports that IMF Managing Director Kristalina Georgieva said she plans to advise the Fund’s steering committee on Friday to double the current US$50 billion in emergency financing available to assist developing countries in containing the virus.

US coronavirus cases surpass China and Italy

As of this writing, the United States now has 105,470 COVID-19 cases overtaking China’s 81,997 and Italy’s 86,498 according to the Johns Hopkins Coronavirus Resource Center.

This weekend, US President Donald Trump plans to have a meeting at the White House to listen to recommendations from his coronavirus task force to “open the country up” as the economic tensions continue due to the pandemic.

Mixed sentiments and the next moves of the Dow and S&P 500

CNBC’s Mad Money host Jim Cramer feels positive that this Thursday’s rally gives America hope for the next days to come.

“In the last 24 hours, we got something that we haven’t felt in a long time. It’s called hope […] And while there’s still no joy, at least we know that a victory is possible, as the stock market showed us with the third day of this astounding rally from the depths of the abyss,” he said.

He also advises not to get too bullish as the market may retest its lows, next week.

In contrast, Canaccord Genuity’s Tony Dwyer expressed his sentiments that a short-term recession may be just around the corner.

His recent sentiments carry both fear and optimism, telling CNBC’s Trading Nation that “Once you make a panic low, you typically have this relief rally […] Unfortunately, the vast majority of the time you go back down and test that low […] The time to be cautious was in January and February. We made the panic low. While we may test that low, it’s not the time to get scared.”

Featured image courtesy of Work Projects Administration

Alec Padua

Alec a former mobile app developer turned independent singer-songwriter and busker based in the Philippines, who goes by the stage name "Alex Corner". He has released songs on Spotify and other music digital platforms. A self-taught trader and financial market enthusiast, he also started his own YouTube channel and blog called "The Trading Comedy" where he documents his trading journey in the Philippine Stock Market and beyond. He is also a casual gamer and streamer who enjoys FPS, RPG, and strategy games as well as conducting live charting sessions in the financial markets.

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