This morning the Labor Department reported its latest look at unemployment claims, which rose unexpectedly and sent stock futures spiraling downward.
According to the report, 419,000 Americans filed for unemployment insurance last week. Economists had anticipated significantly fewer claims — about 350,000. Analysts had expected the data to reflect the lowest number of assistance requests since the pandemic began.
The previously reported period reflected about 368,000 claims.
This news coincides with mounting cases of the delta virus variant that is spiking hospitalizations and fear that the world could be in for another wave yet.
The three major benchmarks are solidly in rebound territory after a pretty devastating loss on Monday. Yesterday, the Dow Jones Industrial Average ticked up another 186 points, while the S&P 500 and the Nasdaq also inched ahead nearly 1%. Today, futures pointed to further gains.
This morning, the Labor Department released its latest look at initial jobless claims, and investors were expecting another pandemic-era low, somewhere around 350,000 new claims.
Meanwhile, AT&T reported this morning that wireless subscriber additions came in higher than expected. American Airlines and Southwest also reported revenue jumps for the second quarter.
Stock futures tied to the Dow Jones Industrial Average pointed to an opening decline of 500 points this morning. Futures on the S&P 500 and the Nasdaq also sunk a great deal this morning, as investors weighed the implications of increasing virus cases.
This news comes after each of the major benchmarks logged declines last week, with the Nasdaq falling 1.87%, the Dow decreasing 0.52%, and the S&P 500 trimming 0.97%.
Investors this week will receive corporate earnings reports from the likes of Netflix, United Airlines, and Chipotle.
Meanwhile, the special purpose acquisition company, known as Pershing Square Tontine Holdings, has backed out of a deal to buy 10% of Vivendi’s Universal Music Group.
“We underestimated the reaction that some of our shareholders would have to the transaction’s complexity and structure,” said Bill Ackerman, who backs the company.
The pandemic has shifted so much when it comes to shopping, and small businesses have had to quickly adapt and transform in order to stay afloat. One of the biggest changes that retailers have had to integrate over the past year and a half is a contactless payment option.
“Consumers are not only moving online and to ecommerce, but they’re also demanding digital payments and commerce experiences in-store with things like QR codes, that enable secure contactless payment,” one expert says.
He continued: “They want to be able to buy online and pick up in-store, order online and pick up curbside, or try a shirt on in-store and have the right size and color be waiting in their online shopping cart. Consumers are demanding these new experiences and businesses need to quickly adapt to meet these new customer demands – and this is what is driving the need for business and payment systems.”
Stock futures saw slight gains this morning as the first week of second-quarter earnings reports neared a close.
Futures contracts tied to the Dow Jones Industrial Average increased 0.13%, while S&P 500 futures climbed 0.16%, and Nasdaq-100 futures rose 0.2%.
Bank of America, Boeing, and shares of airlines, casinos, and energy names performed well during the premarket.
This morning, investors will also receive the retail sales report for June. Despite a relatively positive week of corporate earnings reports, the market remained muted.
Some believe the extra-hot inflation report could be at least partly responsible for the reaction.
“I’m not saying that this is a one-month phenomenon,” said Treasury Secretary Janet Yellen yesterday. “But I think over the medium term, we’ll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it.”
When it comes to the central bank’s accommodating monetary policy, investors can rest easy. Federal Reserve Chairman Jerome Powell said yesterday that officials are looking for “substantial further progress” on the economic recovery front before they stop their extensive bond-buying program. They will also keep rates near zero as they wait for that improvement.
He maintained his stance that the inflation surge is temporary, and he noted that much of the increase can be attributed to the used-car industry.
“It’s all kind of the same story,” he said in his testimony before the House Financial Services Committee. “It’s a shortage of semiconductors. There’s also very high demand for various reasons.”
He continued: “It’s just a perfect storm of high demand and low supply and it should pass. Unless we think there’s gonna be a multi-year, many-year shortage of used cars in the United States, we should look at this as temporary. We very much think that is.”
He is slated to testify today before a Senate committee.
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Hey there, Bullets Fans –
Your Morning Bullets Brief Updates are here! And that means trivia is, too.
Who said the following?
“Stay afraid, but do it anyway. What’s important is the action. You don’t have to wait to be confident. Just do it and eventually the confidence will follow.”
Think you know the answer? You can check it in the closing area down below!
Vice President Kamala Harris got herself into trouble, recently, for literally laughing when asked about her plans to visit the site of the border crisis that President Joe Biden created.
After former President Donald Trump announced his own plans to visit the border, however, Harris quickly scrambled to get a trip on her calendar — exactly one week before his.
The “coincidental” nature of her arrival in El Paso on Friday is lost on no one, but her office is defending the lie.
“This administration does not take their cues from Republican criticism, nor from the former President of the United States of America,” a spokesperson said. “We have said, over a number of different occasions — and the vice president has said, over the course — over the last three months, that she would go to the border. She has been before. She would go again. She would go when it was appropriate (and) when it made sense.”
Investors received an important inflation indicator yesterday that included some pretty dramatic data. According to the Commerce Department, that report pointed to a 3.4% increase last month.
The core personal consumption expenditures price index has not logged such a drastic year-over-year increase since the beginning of the 1990s, experts say. The spike likely reflects the economic explosion as businesses reopen, especially when compared to the despair of last year.
The Federal Reserve typically uses this report as a way to justify changes in monetary policy, though officials continue to reassure investors that the inflation increase is a temporary feature of the healing economy.
