The Dow Jones struggled on Thursday as jobless claims reinforced Wall Street's desperate need for fiscal aid.
The Dow Jones traded slightly lower on Thursday, as initial jobless claims gave Wall Street a stark reminder of how badly fiscal stimulus is needed to keep the U.S. stock market afloat.
All three major U.S. stock market indices came under pressure on Thursday, with the Nasdaq falling 0.7%. The S&P 500 slipped 0.2% while the Dow edged slightly lower.
Initial jobless claims are consistently one of the most hotly anticipated data releases in the U.S. every week, and today’s numbers were a clear disappointment to investors. Despite expectations of a slight dip to 825,000, claims instead spiked to 898,000.
Watch the video below for a full rundown of the numbers.
In recent weeks, Dow bulls have been able to point to a declining in continuing claims comfort. Unfortunately, as the following excerpt from ING research demonstrates, the decline in continuing claims isn’t what it appears at the surface:
It is important to remember that the numbers don’t match up because there is a week lag between initial claims and continuing claims and then a further week lag for the total number of people on unemployment benefits. As of the week of September 26, there were 25.29mn people receiving some form of unemployment benefit versus 25.5mn the week before. While there are issues relating to fraudulent claims that are being investigated, the report is not giving us any uplifting news.
It is also worth noting that many people are now burning through their 26 weeks of unemployment benefits. With rising coronavirus cases pointing to a tough winter, it seems unlikely that jobless claims will fall substantially anytime soon.
Watch the video below for the current state of the global pandemic.
Stimulus talks are also proving to be a problem for Wall Street optimists, as Mitch McConnell and Senate Republicans provide stern resistance to the Democrats’ proposal. U.S. Treasury Secretary Stephen Mnuchin has made it clear that he is prepared to work with Nancy Pelosi, but McConnell says he will not acquiesce to White House demands for a $1.8 trillion bill.
On another shaky day for the Dow 30, tech stocks took the brunt of the losses. Salesforce.com, Apple, and Microsoft were all under pressure as the Nasdaq slipped. Apple stock has been vulnerable since its iPhone 12 reveal, posting a few days of choppy trading.
Watch the video below for the latest market analysis on Apple.
Surprisingly, one of the weaker stocks in the index over the last 12 months was the strongest today, as Walgreens posted an impressive 3% rally. The move came on the back of better than expected earnings for the company.