Stock market news today
Two major news move the stock market today:
- Texas halts reopening process due to rising cornonavirus infections
- Initial weekly jobless claims came in at worse than expected, showing weakness for the labor market
“Stocks wavered between gains and losses Thursday after Texas said it was pausing its reopening process due to a renewed surge in Covid-19 infections in the state. Investors also monitored incoming economic data, with a new report showing stubbornly high levels of new unemployment claims.
New unemployment claims came in at 1.48 million for the week ending June 20, marking the fourteenth straight week that claims held above one million. Consensus economists had expected new claims to total 1.32 million. Since mid-March, new jobless claims totaled more than 47 million.
“Jobless claims are not falling fast enough. Everything we have seen in the last week or two between rising case counts/hospitalizations, stalling economic progress in some important states, government job cuts, means one thing: the Phase 4 of fiscal stimulus must be bigger,” Neil Dutta, head of economics at Renaissance Macro Research, said in an email. “Things should be better in 3-4 weeks, but the news will get worse before it gets better.”
Source: Yahoo Finance
An economic slowdown is a bad news for the stock market
“With the pandemic still ongoing, the International Monetary Fund on Wednesday slashed its outlook for 2020 global growth to a record low estimate of -4.9%, down from its April estimate of -3%. US global growth is expected to fall by 8.0% in 2020, down from a previous forecast of -5.9%, before rising by 4.5% in 2021.”
If these projections come true, then this is not good news for the stock market and stocks. Defensive stocks and sectors such as Consumer Defensive, Healthcare, and Utilities may see a rotation in capital invested.