Futures Drop on COVID-19, Jobless Data
U.S. stock futures slid further on Thursday following Wall Street’s worst stock trading day in two weeks. Investors were unnerved by an alarming increase in new coronavirus cases and an elevated weekly jobless claims number.
Data showed about 1.48 million Americans signed up for unemployment benefits in the previous week. The number came in only slightly below the 1.5 million in the prior week. Weak demand then forced U.S. employers to lay off workers even as businesses reopened.
Walt Disney Co futures slipped 2.6% in premarket stock trading after it delayed the reopening of theme parks. According to reports, the company was considering postponing the July 24 release of “Mulan”.
Markets had considered perfection in the over almost three months that reopening (businesses) will begin to kickstart the economy off the lows. This was a statement from Michael Hans, chief investment officer at Clarfeld Citizens Private Wealth in Greater NY City Area.
But the course of the pandemic remains uncertain “and until we have a little bit more clarity, it’s only natural that markets take a breather here,” Hans added.
The resurgence in coronavirus cases across the United States has revived fears of another lockdown to contain the pandemic. It threatened to halt a Wall Street rally that was powered by the raft of global stimuli since late March.
After coming within 5% of its record high in early June, the benchmark S&P 500 lost nearly 6%. Analysts cautioned further declines in futures amid worsening economic forecasts.
The International Monetary Fund warned of a nearly 5% plunge in the global economic output in 2020 on Wednesday.
Furthermore, Boeing Co stocks tumbled 4% as rival Airbus reached a crucial jetliner production target and smoothed recent industrial problems.
Berenberg also reduced its rating on the U.S. planemaker’s shares to sell. It notes elevated near-term risks linked to the pandemic. It also notes the pace of recovery in air travel and uncertainty related to production rates.
Moderna Inc rose 4% after it signed a partnership with contract drugmaker Catalent Inc. This was to support the production of 100 million doses of its experimental COVID-19 vaccine.
The wobbling U.S. stock futures lead businesses to revisit plans for resuming normal operations. Investors’ hopes of a rapid economic recovery are damping.
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