The Dow Jones endured a large pullback on Thursday.
Unemployment claims and also a grisly GDP report weighed the U.S. stock marketplace.
1 economist warns monetary market pricing remains overly optimistic.
A day relief rally started the stock marketplace off its highs, but the Dow Jones Industrial Average (DJIA) nevertheless hurtled toward a significant reduction before the final bell.
Awful financial statistics walloped Wall Street – also retained the Dow down over 200 points.
Dow Jones Struggles Following Weakest Quarterly GDP Reading In Background
As of 3:19 pm ET, the Dow Jones had dropped 235.63 0 or points.89% to collapse into 26,303.94.
The Dow Jones fell on Thursday as dreadful financial statistics weighed the U.S. stock marketplace. | Resource: Yahoo FinanceIt wasn’t all doom and gloom from the stock marketplace, however. The Nasdaq rode optimism about Substantial Tech earnings to a 0.56% rally.
The S&P 500 slid 0.35% to 3,247.14.
Investors had lots of information to digest Thursday; jobless claims and GDP data dominated the headlines.
Though the -32% quarterly GDP reading was technically better than expected, it still constituted the worst contraction in recorded history. Wall Street should have been well priced for this, but the frightening number appeared to dent risk sentiment.
Adding to the Dow’s woes, initial jobless claims came in well above 1 million for the 19th straight week.
Continuing claims held above 17 million, suggesting a rapid rebound in the jobs market was never anything more than a fantasy.
Stock Market Pricing Looks Too Optimistic
Many economists believe the onthe-ground reality has diverged wildly from stock market pricing.
James Knightley at ING warns that despite all the visible damage, investors continue to price in a “vigorous recovery” that just hasn’t materialized.
We now know that the deepest ever quarterly regeneration was -32.9% annualised. Financial markets are already priced for a vigorous recovery, but with virus fears on the rise, jobs being lost, and incomes being squeezed as unemployment benefits are cut, we feel the recovery could be much bumpier… We are in for some data disappointment over the next couple of months – starting with next week’s payrolls number.
U.S. GDP growth fell off a cliff in the second quarter amid the COVID-19 pandemic. | Source: Think INGIf the Federal Reserve is correct and the future of the U.S. economy is tied to pandemic outcomes, Wall Street may start paying more attention to the virus numbers again.
With 1,400 deaths in the most recent daily numbers, approximately one fatality per minute paints a stark picture of the unfortunate state of affairs.
And if that’s not enough, CNBC talking head Jim Cramer fears President Donald Trump’s alarming (if toothless) comments on the upcoming election could forebode a new breed of political headwind for the stock market.
Dow 30: Big Oil, Big Losses
On a rough day for the Dow 30, only a handful of stocks managed to trade higher.
The overall index found support from Apple, which rose 0.9% ahead of its post-bell earnings report. Elsewhere, blue-chip DJIA stocks suffered heavy losses.
Aerospace giant Boeing fell another 2.5% on reports it may have to execute even more job cuts. Global threat bellwether Caterpillar took a 2.7% knock.
Oil supermajors Chevron and Exxon Mobil dropped 3.9% and 4.6%, respectively.
Dow Inc. was its weakest stock from that the index, lasting a 4.7% reduction.