Wall Street too optimistic as futures rise while waiting for jobless claims

Wall Street too optimistic as futures rise while waiting for jobless claims

Wall Street analysts are getting way ahead of themselves as the stock futures continue to rise to await jobless claims.

Another round of anticipating jobless claims figures await analysts as the U.S. economy tries to create a positive outlook.

Yesterday, the Dow and S&P 500 dropped during its normal trading hours, losing 0.91% and 0.70% respectively.

Peloton making noise in the Fitness sector

The company in focus as per CNBC is fitness company Peloton, with its revenue surge of 66% during its fiscal third quarter. Peloton’s earnings per share reported a 20 cents loss—exceeding analysts’ expectations of a 17 cents loss, according to a Refinitiv poll.

However, Peloton’s total revenue grew US$316.7 million [AU$ 491.95 million] a year ago to US$524.6 million. In addition, they also finished strong in the markets last April, increasing their share price to over six percent after reports came out about conducting its largest workout class ever.

Perhaps investing more in the fitness sector might be a good move once Wall Street takes notice.

Wall Street too optimistic as futures rise while waiting for jobless claims

Analysts expecting jobless claims to break new highs

Currently, the market participants try to analyze the Labor Department’s latest report of jobless claims as they expect another 3.05 million workers to have filed on May 2.

Wall Street analysts are expecting another record-breaking drop as the coronavirus is still in the air.

According to news from USA Today, if the latest weekly total matches analysts’ forecasts, it will mean that an estimate of 33 million Americans has applied for unemployment in just seven weeks, exceeding all the jobs generated since the Great Recession by over 12 million.

Wall Street investors observe fear of missing out in the markets movements

Wall Street analysts claim that the fear of missing out has been playing big in recent market volatility for this week.

Andrew Harmstone, head of global balanced risk control strategy at Morgan Stanley Investment Management, told CNBC’s Street Signs Asia that investors should keep their portfolio risk small as he adds:

“It’s true that … by maintaining a defensive position you’re not capturing the full benefit of the rally, but remember, volatility is so high that even a defensive position still actually gives you a fair amount of upside just because the moves are so big.”

In addition, former Morgan Stanley Asia chairman Stephen Roach cautions investors as well not to be overly optimistic as he observes the markets rising sharply. He also tells CNBC’s Trading Nation that most investors are currently not worried about the interest rates but the long-term debt that is sparking the crisis may have a grip on the overall economy.

Wall Street traders shouldn’t be too comfortable with the Fed saving the Dow Jones through their purchasing programs as the world is still far away from a coronavirus vaccine.

Images courtesy of Anthony Quintano/Flickr, Andrea Piacquadio/Pexels

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