As the number of confirmed COVID-19 cases in the United States continues to rise dramatically, there is more cause for concern in the economy.
The release of the weekly jobless claims numbers has severely impacted the U.S. economy. The numbers released on Thursday morning revealed that jobless claims had risen to an all-time high. The new record dwarfs the numbers seen during the 2008 global recession.
Then, the total number of jobless claims was less than 700,000.
Now, they are almost five times higher. Millions of employees are already out of a job with the worst still yet to come.
But what are the likely implications for the stock market?
Major upcoming influences on the market:
- The stimulus bill: Still awaiting approval by the House of Representatives, we expect that this will be one of the major indicators of what direction the market will take next.
The Federal Government is ready to disburse $2.2 trillion as an immediate relief package. If confirmed COVID-19 virus cases continue to increase at an exponential rate, the country is sure to see greater financial distress in the weeks to come.
- President Trump’s statement on reopening the economy: President Donald Trump stated on Friday in an interview with Sean Hannity that he might be targeting as soon as Easter to reopen the economy.
However, this seems to be an overly optimistic target, with most health advisors declaring that the U.S. needs to wait for the pandemic to pass or at least be somewhat under control before any major actions can be taken.
“You can destroy a country this way, by closing it down, where it literally goes from being the most prosperous,”Donald Trump
The USD lost ground to most other currencies on Thursday but in the early hours of Friday has regained some of this ground.
The economic situation has reached such a critical stage that even the best technical strategies can be misleading in such a volatile and uncertain environment.
As such, we might have to increasingly rely on fundamentals to better determine what direction the market is likely to take in the near future.
The House is scheduled to make its final decisions on the stimulus bills on Friday.
A unanimous decision is a possibility, but not a certainty. In any case, the country might already be in recession despite the extreme measures that have already been undertaken.