The stock market has been closing with record numbers, topping off a year of uncertainty. On Wednesday, two major indexes closed with minor gains, taking the S&P 500 to a new high of 3,669.01 points.
- The S&P 500 gained 0.18% during the day.
- The Dow Jones Industrial Average gained 0.2%
Investors have recently taken confidence from the news that Coronavirus Vaccines will be available to front-liners by the end of the year. A change in national leadership has also given some confidence to investors. Joe Biden’s apparent win at the polls has investors optimistic of a politically moderate and less-volatile President.
However, two stories could create volatility on Thursday and Friday, and they’re both linked directly to the economy.
The Latest Jobless Claims Report is Due Today
The Labor Department will release its weekly jobless claims report today, and analysts predict that it won’t be good. Up to 775,000 new jobless claims are expected to be reported, which will only be a minor change from the 778,000 new claims that were reported last week.
Total jobless claims (new and continued) are expected to be 5.9 million. Note that this figure doesn’t indicate total unemployment, as many who are unemployed or underemployed don’t qualify for claims.
The US Government Accountability Office said on Monday that the Labor Department hasn’t been able to report accurate numbers because states are backed up with claims that they can’t process. The federal agency says that the real number of jobless claims would be much higher, possibly by millions.
The jobless data reflects the state of the economy. With a quarter of a million new claims every week, we could be months away from the widespread economic recovery that investors are betting on.
Rising Coronavirus Cases
Coronavirus infection rates are also increasing, and this is impacting state economies. In the Federal Reserve’s most recent Beige Book report, it noted that three out of four Midwestern districts reported economic shrinkage in November as Coronavirus cases increased.
California has recently implemented sweeping lockdowns and curfews in some counties, in an effort to control a new wave of the virus. Until vaccines are widely available, Coronavirus news will continue to impact investor sentiment.
Investors are advised to take these news items, reported financial data, and recent stock movement into account when making stock picks at the end of this week.
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