Not much mystery to today’s selling. Investors and traders were trimming positions–or more–ahead of tomorrow’s report on initial claims for unemployment. Last week brought a record 3.28 million new claims for unemployment as the coronavirus and “shelter in place” orders knee-capped the U.S. economy. State officials said last week that the totals would have been higher except that unemployment offices and Internet sites were overwhelmed with applicants.
That has led some economists to project that this week’s initial claims for unemployment will beat last week’s record. Economists’ projections take in a huge range from a low of “just” 3 million new claims to a high–and new record–of 5.5 million. For some context, the last report before the full coronavirus spike showed 281,000 new claims.
Today, in preparation for what could be a really shocking number, some investors and traders sold. The Standard & Poor’s 500 closed down 4.41% to 2470.50. The Dow Jones Industrial Average finished down 4.44%. The NASDAQ Composite dropped 4.41% and the Russell 2000 was lower by 7.27%. The iShares MSCI Emerging Markets ETF (EEM) was down 4.25%.
Stocks that have already been pummeled got pummeled some more. Carnival (CCL) dropped another 32.18% and Royal Caribbean was lower by 19.18%, for example.
But blue chips and stocks that have so far held up relatively well during the bear, also sold off strongly. Coca-Cola (KO) flexed down 4.81%. Nvidia (NVDA) dropped 7.79%. Intel (INTC), which has been riding a theory that with more people working at home more people would be buying laptops and PCs and displays, fell 4.14%.
Oil was mixed on the day with U.S. benchmark West Texas Intermediate up 1.81% to $20.85 a barrel but international benchmark Brent getting a 5.43% haircut to $24.92.
Gold was slightly higher by 0.33% to $1601.0 an ounce. The dollar rose with the Dollar Spot Index (DXY) gaining 0.49%.
The yield on the 10-year Treasury fell 5 more basis points to 0.62% and the yield on the 2-year Treasury slide to 0.24%.
