Wall Street is poised to regain some of its losses, despite new unemployment numbers showing that a decade’s worth of job gains wiped out in five weeks.
MANHATTAN (CN) — High unemployment claims rolled in again Thursday, with weary investors yawning at data at they likely expected.
An additional 4.4 million in new unemployment claims were filed last week, the Labor Department reported, bringing the total since mid-March to more than 26 million.
All of the 23 million jobs created since the 2009 market crash, during both the Obama and Trump administrations, are now gone.
Several states continued to see high unemployment, though not as many claims were filed as in weeks prior. One notable outlier, Florida, meanwhile saw a huge spike in new claims, recording an additional 324,000 claims compared with an estimated 180,000 the previous week.
Also notable was that federal civilian employees are now starting to file claims en masse, with 11,562 filing claims the first week of April compared with 535 from the week prior.
Once again, the dire data barely moved the needle for U.S. markets, which remained close to flat as the report released at 8:30 a.m. EST.
At the opening bell, the Dow Jones Industrial Average gained 90 points, as tepid investors hoped to regain some of the week’s losses. The S&P 500 and Nasdaq both increased less than half a percentage point.
Investors have largely “baked in” the huge spike of unemployment claims, even though it has outpaced most analysts’ predictions during the last several weeks.
“So far equity markets have looked through the horrid data on the assumption that lockdowns will soon begin to ease and economic activity will return to normal, but the longer we remain in this state of limbo as new cases declined but at a painfully slow rate, the harder it will be for the bulls to push equity prices higher,” Boris Schlossberg of BK Asset Management wrote in an investor note Thursday morning.
In Europe, the focus partially turned to the European Council, which is meeting virtually today to discuss how to fund various stimulus packages for member countries.
In its Roadmap for Recovery, the council has called for “a Marshall-Plan type investment effort” that includes the central banks keeping rates down and investing in clean and digital technologies.
Polish Prime Minister Mateusz Morawiecki has called for an ambitious fiscal stimulus. “We already know that the belt-tightening strategy of the years 2007-2013 did not work,” Mateusz posted in Polish to his Facebook account. “What is needed is fiscal impulse that will flow from the heart of the European Union and revive our economies.”
Mateusz said new taxes, better fiscal control and dismantling tax havens could pay for the stimulus. “That’s how we cope with the consequences of the pandemic, defining the European Union anew,” he wrote.
During the meeting, German Chancellor Angela Merkel said countries must be prepared for higher taxation. “One thing is already clear,” she said at the Bundestag, “we must be ready, in the spirit of solidarity, and for a limited time, to provide much higher contributions to the European budget.”
European markets were up slightly around 9 a.m. EST, buoyed somewhat by increasing prices of Brent crude after the historic drop in oil prices earlier this week.
Brent crude, which comes from Europe on tankers, increased to just under $22 per barrel early Thursday. The West Texas Intermediate, which represents landlocked oil in the United States, was priced at about $16 barrel.
On Wednesday, investors rallied following passage by the Senate of $310 billion in additional funds for the Small Business Administration’s Paycheck Protection Program. Hope for the program might soon turn sour, however, as banking groups anticipate the infusion of cash has a fast-approaching expiration date.
The House is expected to vote on the SBA bill on Thursday, after which President Trump will likely sign it immediately.
Worldwide more than 2.6 million people have been confirmed infected by Covid-19, according to data from researchers at Johns Hopkins University, and more than 184,000 have died. More than 842,000 people in the United States have contracted the virus, while nearly 47,000 have died.