Wall Street without leadership despite declining numbers of new unemployed

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Wall Street ended in disarray Thursday, digesting the news of a drop in new weekly claims for unemployment benefits in the United States and regretting the blockage in Congress on a new stimulus package.

Its flagship index, the Dow Jones Industrial Average, fell 0.29% to 27,896.72 points.

The Nasdaq, with strong technological coloring, took 0.27% to 11,042.50 points.

The S&P 500 index fell 0.20% to 3,373.43 points, failing to break its February record.

New jobless claims fell last week in the United States, falling below the million mark for the first time since March, according to figures released Thursday by the Labor Department.

Some 963,000 people registered as unemployed in the United States between August 2 and 8, down from 1.19 million the previous week. It is also much less than expected by analysts, who expected 1.15 million.

These figures seem to confirm the overall downward trend observed since April, despite a brief rise in jobless claims at the end of July with the surge in coronavirus contamination in the United States.

However, the level remains much higher than those observed before the pandemic.

Market players have also remained attentive to parliamentary negotiations around new stimulus measures to help American communities, businesses and households, but the discussions seem to be stalling.

For Chris Low of FHN Financial, Democrats and Republicans “are miles apart and it’s really disheartening.”

“There is no longer a sense of urgency,” he adds.

Faced with the lack of progress, Donald Trump signed four decrees last Saturday on a wage freeze, additional help for the unemployed, protections against expulsions and a postponement of the repayment of student loans.

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However, these temporary measures risk being challenged in court since it is in Congress that the US Constitution vests most of the country’s budget decisions.

Investors were also on the lookout Thursday for any news about a potential vaccine against the coronavirus, which could cause a stir on Wall Street.

“At the end of the day, the current level of the market doesn’t make any sense at all unless the economy is healthy within a year,” which implies an effective vaccine, notes Low.

On the bond market, the 10-year rate on US debt rose to 0.7159% around 8:20 pm GMT against 0.6747% Wednesday evening.

Nasdaq

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