The Dow Jones rallied on Thursday, as investors looked to buy the dip after a miserable few days of trade, shrugging off some worrying jobless claims figures in the process.
All three major U.S. stock market indices rallied, with the Nasdaq leading the way with a 1.3% gain. The S&P 500 and Dow Jones were close behind with a 1.1% move each.
Economic data were mixed Thursday, as hotly anticipated jobless claims figures came in worse than expected at 870,000. Unemployment continues to be stubbornly high, with continuing claims also worse than estimates above 12.5 million, though this number did decline.
There is no V-shaped recovery in the jobs market, a fact that economists have been warning about for months. ING’s James Knightley explains that, despite the lofty valuations on Wall Street, jobless claims remain significantly higher than in 2008:
There are clearly ongoing strains in the jobs market – remember that the peak in initial claims during the Global Financial Crisis was 665k the week of March 27, 2009, so we are still 200k above that. Meanwhile, high frequency Homebase employment data suggests that jobs growth has stalled  and with Covid-19 cases picking up again there are also worries about the reintroduction of new containment measures, similar to what we are now seeing again in Europe.
Elsewhere the U.S. housing market continues to surge, with new home sales eclipsing the 1 million mark. Watch the video below:
Once again, the “vaccine progress” storyline appeared to be supporting the Dow, with Johnson & Johnson possibly taking over as the front-runner.
Despite plenty of economic and pandemic-related data pointing to the opposite, the Federal Reserve’s James Bullard said Thursday that the U.S. economy could fully recover by the end of 2020 .
To get a sense of just how outrageous this is, consider that Europe is currently locking down parts of its economy again with record cases in several key economies . Airlines, cruise lines, and many small businesses are on the brink.
Watch the video below on Covid-19 misconceptions:
Faking GDP numbers with a fiscal injection might be the only way for the “full recovery” to take hold, but even that looks some way off.
On a pretty calm day for the Dow 30 , there was plenty of volatility under the hood as Goldman Sachs, which rallied 5.8%.
Boeing was less fortunate, falling around 3% as the outlook for its core jet business remains uncertain.
A more robust tech sector helped to support the index, as Apple rallied 2% after a torrid few days of trade in the Nasdaq.