In the foreground, US GDP in the first quarter, which was revised downwards by the contraction of -4.8% initially disclosed at -5%.
The deterioration in the labor market was confirmed by the initial requests for unemployment benefits which, in the week ended March 23, exceeded 2.1 million (meaning that more than 2.1 million Americans were unemployed who asked to receive state subsidies).
It is the tenth consecutive week that requests exceed 2 million. Since the outbreak of the pandemic, a total of 46 million Americans have applied for grants.
However, new requests have fallen steadily since they rose by 6.9 million in the week ending March 28.
US durable goods orders were also very bad, falling 17.2% in April, slightly better than the 18.2% drop expected by the consensus.
The S&P 500 and the Dow Jones closed yesterday’s highs since early March, while the Nasdaq has reported the highest close since February 20.
Barry Bannister, chief strategist for equity at Stifel, known for predicting the recovery of the US stock market from the March lows, wrote in a note that he believes that the S&P 500 will rise 7% by August , up to 3,250 points.
The gains of the last few sessions led the S&P – which had fallen by 34% from the record close of February 19 to the low of March 23 – to oscillate at a value approximately 10.3% lower than its maximum values.
Weighing are the headlines of social networks like Twitter and Facebook, after the threats from President Donald Trump.
Among other corporate stories to be monitored, also American Airlines which announced a plan to cut managerial and administrative staff by 30%. This is a reduction of about 5,000 jobs, due to the consequences of the coronavirus pandemic that have affected the airline and the entire sector.
Tensions between the United States and China also weigh on the markets, after Beijing approved the proposed national security law that entails new holds on Hong Kong.
Just yesterday, US Secretary of State Mike Pompeo announced that he had reported to Congress that the US can no longer certify Hong Kong’s political autonomy: a statement that, if endorsed by Congress and President Donald Trump, could result in the removal of the special commercial status of the city state.
At the same time, the Chamber approved a decree-law authorizing sanctions against Chinese officials responsible for abuses of human rights against Muslim minorities.
Yesterday from the Beige Book, the report on the conditions of the United States economy that is released by the Federal Reserve eight times a year, it emerged that “economic activity has slowed down in all the American districts examined, with most affected by a strong contraction “.