Stocks edged higher Thursday after the futures market pointed downwards. The rally did show signs of fatigue, as investors weigh bleak economic data rolling in and the possibility of reopening around the globe.
All three major U.S. indices rose marginally Thursday, with the S&P 500 up as much as 0.6%, before the Dow Jones Industrial Average dipped into negative territory. The index is flat for the week, while investors have been piling into the 10 year treasury bond, which now yields 0.61%, down from the 0.63% it yielded Wednesday and 0.76% Monday. Investors seem to be moving into safety.
Jobless claims for the past week totaled more than 5 million, making the total number of people captured in the data about 15 million, a significant portion of the population.
Positively, Germany may reopen its economy and some states in the U.S. may also do so, although some investors have “confusion” over that, according to Lauren Goodwin, economist and multi-asset strategist at New York Life Investments.
Stocks have risen 24% from their 2020 lows made March 23 as investors have looked past 2020, pricing in a rebound from what is likely a recession.
But stocks have been and may remain "range bound” in the near-term, while earnings estimates catch up to prices, CLS Investments’ Chief Investment Officer Marc Pfeffer Told TheStreet.
As for sentiment more broadly, “Global risk appetite deteriorates as ugly economic data added to weak bank earnings confirm that a size-able recession is knocking on the door,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank in emailed remarks to reporters. “Chances are that we see a renewed bearish wave."
"Worries over the damage done to economic growth from social distancing policies have resurfaced,” wrote Jasper Lawler, head of research at London Capital Group. "This is raising alarm bells about the current market rally.”
Meanwhile, United Airlines (UAL) secured $5 billion, mostly in grants, from the government, while some of the amount is a low interest loan. The stock still fell 7.93% Thursday and is down 67% year-to-date.
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