Dow Futures, Coronavirus, Amazon, Disney - 5 Things You Must Know Thursday

Stock futures sink as Fed sees long road to economic recovery; coronavirus cases in the U.S. top 2 million; Disneyland to reopen July 17.

Here are five things you must know for Thursday, June 11:

1. -- Stock Futures Sink on Fed's Grim Outlook

Stock futures fell sharply Thursday after the Federal Reserve said it would take a long time for the U.S. economy to recover after being battered by lockdown measures instituted during the coronavirus pandemic. 

Rising cases of coronavirus infections in many countries, including the United States, as lockdowns ease also put investors on the back foot early Thursday.

Contracts linked to the Dow Jones Industrial Average dropped 557 points, futures for the S&P 500 sank 54 points and Nasdaq futures tumbled 133 points.

The Federal Reserve on Wednesday left interest rates unchanged and projected interest rates would remain near zero through 2022. The central bank also said it keep buying bonds, adding it would do what it takes to prop up the economy. 

"The Fed remains pessimistic about the economy and said the coronavirus outbreak will continue to weigh on economic activity, employment and inflation in the near term. It expects unemployment to remain elevated for years," said Anthony Denier, CEO of New York-based commission-free trading platform Webull. "Because of this, the Fed is leaving rates unchanged and said it expects to leave them unchanged until 2022."

Fed officials made clear they plan on holding rates at near zero until they are confident the economy is on track for inflation to reach their 2% target and for the unemployment rate to fall back in line.

“We’re not thinking about raising rates, we’re not even thinking about thinking about raising rates,” Federal Reserve Chairman Jerome Powell told reporters at a press conference following the Fed's announcement on interest rates.

“We are strongly committed to using our tools to do whatever we can for as long as it takes," he added.

The Fed said it expects the U.S. economy to contract 6.5% in 2020, but then expand by 5% in 2021, raising the specter of a possible boomerang recovery that may still be fraught with both uncertainty and possibly inflation.

"While the Fed was successful in helping the stock market recover from the coronavirus-driven selloff in March, the jury is out on how much the Fed is helping the economy recover," said Danielle DiMartino Booth, CEO and chief strategist of Dallas-based Quill Intelligence and a former Fed advisor. "Analyzing the Fed's economic projections at this time when much of the economy is still opening is riddled with uncertainties."

The Dow on Wednesday declined 282 points, or 1.04%, to 26,989, the S&P 500 declined 0.53% and the tech-heavy Nasdaq closed at a record high of 10,020, up 0.67%.

2. -- U.S. Jobless Claims Seen Falling Further

The economic calendar Thursday includes weekly Jobless Claims at 8:30 a.m. ET. Economists forecast the number of Americans filing for first-time unemployment benefits at 1.565 million for the week ended June 6, vs. 1.877 million in the previous week, bringing the 11-week total to nearly 43 million.

There are fears that those out of work may not have jobs waiting for them after lockdown measures and stay-at-home orders shuttered many businesses.

”My assumption is that there will be a significant chunk, well, well into the millions of people who don’t get to go back to their old jobs and there may not be a job in that industry for them for some time. It could be some years before we get back to those people finding jobs,” said Federal Reserve Chairman Jerome Powell on Wednesday.

The calendar also includes the Producer Price Index for May at 8:30 a.m.

Earnings are expected Thursday from Adobe  (ADBE) - Get Report, Lululemon Athletica  (LULU) - Get Report and Dave & Buster's Entertainment  (PLAY) - Get Report.

3. -- Coronavirus Cases in U.S. Top 2 Million

Coronavirus cases in the United States have topped 2 million, and states like Texas and Florida are witnessing a sharp second wave of infections as states reopen.

“There is a new wave coming in parts of the country,” Eric Toner, a senior scholar at the Johns Hopkins Center for Health Security, told Bloomberg. “It’s small and it’s distant so far, but it’s coming.”

The U.S. coronavirus death toll was nearly 113,000, according to Johns Hopkins University. Worldwide cases have increased to more than 7.36 million, and deaths crossed 416,000. 

Texas on Wednesday reported 2,504 new coronavirus cases, the highest one-day total since the pandemic emerged, Bloomberg noted. Florida this week reported 8,553 new cases - the most of any seven-day period.

4. -- Amazon Suspends Police Use of Its Facial Recognition Technology  (AMZN) - Get Report said it would implement a one-year moratorium on the use of Rekognition, its facial recognition technology, by police departments.

In a blog post, the company wrote that it will continue to allow use of recognition by "organizations like Thorn, the International Center for Missing and Exploited Children, and Marinus Analytics," but not by police departments.

"We’ve advocated that governments should put in place stronger regulations to govern the ethical use of facial recognition technology, and in recent days, Congress appears ready to take on this challenge," Amazon wrote in the blog post. "We hope this one-year moratorium might give Congress enough time to implement appropriate rules, and we stand ready to help if requested."

The use of facial recognition technology by law enforcement has drawn scrutiny and condemnation from civil liberties groups, who argue that it could intensify racial disparities in policing and invade privacy more generally.

Amazon shares fell 2.2% to $2,589 in premarket trading Thursday.

International Business Machines  (IBM) - Get Report earlier this week said it would no longer offer its facial recognition and analysis technology and software products for general-purpose use.

5. -- Disneyland to Reopen July 17

Walt Disney  (DIS) - Get Report plans to reopen its California theme parks in July after closing them March 14 because of the coronavirus pandemic.

The company said in a blog post it will reopen the original Disneyland in Anaheim, Calif. on July 17, the 65th anniversary of the park’s opening. Disney said its California Adventure park will reopen on the same day.

Advance reservations will be required for theme park visitors and capacity will be limited, 

“Disneyland Resort will manage attendance through a new theme park reservation system that will require all guests, including annual passholders, to obtain a reservation for park entry in advance,” the company said in a blog post.

Disney has set proposed dates to reopen its Walt Disney World parks in Florida in early July.