Dow Jones in Denial as Gut-Wrenching Unemployment Data Looms
  • Dow Jones Industrial Average (DJIA) futures point to a nervy open on Wall Street Thursday.
  • Traders await another bout of historic jobless claims, which could hit 7 million today.
  • Investors are beginning to doubt the ongoing relief rally with many holding out for new lows.

The U.S. stock market is set for a nervy open on Thursday as yet another economic bomb drops. Dow Jones Industrial Average (DJIA) futures point to a small gain ahead of Thursday’s jobless claims report.

A gut-wrenching 10 million Americans filed for unemployment over the last two weeks. Today’s figure could add another 7 million, according to JP Morgan. Beth Ann Bovino at S&P Global Ratings declared a full-blown recession.

These dismal numbers suggest another record-breaking April jobs report … America is now in recession and as it appears to deepen, the question is how long it will it take before the U.S. recovers.

Some investors think the stock market, which has climbed 25% from its March 23rd bottom, is in denial. Mark Cuban said he’s “surprised” at the relief rally and doesn’t think traders understand how deep this could go.

Dow futures on edge

Dow futures contracts swung as much as 300 points higher on Thursday before settling slightly in the green. This week has been marked by a strong relief rally as stocks bounce off the March 23rd lows.

S&P 500 futures and Nasdaq Composite futures were up 0.23% and 0.11% respectively.

7 million new jobless claims on Thursday?

Thursday’s jobless claims report has become a weekly fixation since America implemented strict coronavirus lockdowns. The policy has plunged the country into an unemployment crisis worse than the 2008 Great Recession.

number of impacted workers is 2.7 billion.

Anecdotally, some unemployment offices say they are fielding up to 500 calls every hour.

Are Dow Jones bulls in denial?

All this brings us back to the stock market. Despite the devastating numbers, the stock market remains firmly in ‘relief rally’ mode, stubbornly pushing higher into today’s open. Investor and Dallas Mavericks owner Mark Cuban thinks the bulls are in denial.

I’m surprised. I think this is kind of buy the rumor and potentially we sell the news when reality sets in. I think people are naturally optimistic right now in terms of the market. I just don’t think they are really factoring in what we are going to see on the other side.

As CCN Markets reported, Cuban was a buyer two weeks ago near the bottom of the initial crash. He claims he hasn’t bought any stocks since and is now building a cash position in readiness for the next drop.

This article was edited by Samburaj Das.

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Last modified: April 9, 2020 11:55 AM UTC

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