The Dow marked its 2nd straight gain — but Thursday jobless claims may pose the stock market’s biggest test amid coronavirus


Jobless claims haven’t been a focal point for investors for more than a decade, but market participants will be keenly watching Thursday’s figures because they could provide the clearest sign yet of the damage wrought by lockdowns that have swept across much of the U.S. to mitigate the spread of the COVID-19.

“’How will the markets survive the U.S. initial claims going ballistic?’ is probably on everyone’s minds this morning” wrote Stephen Innes, chief global markets strategist at AxiCorp.

Check out: Jobless claims set to soar by the millions as layoffs surge due to coronavirus shutdowns

Market participants are bracing for a number that could run into the millions — figures that are likely to bring to an abrupt end the first win streak for the Dow Jones Industrial Average

DJIA, +2.39%

and the S&P 500 index

SPX, +1.15%

since early February.

With one out of every five Americans under some form of stay-at-home measure to help lessen the spread of the illness that was first identified in Wuhan, China, in December, some economists are anticipating that as many as 5 million workers will show as applying for unemployment insurance in the coming weekly report. It is a staggering number that some market participants say is too large to discount and one that will likely knock the air out of a market that is searching for its footing higher.

See: 23 million American jobs in immediate danger from the coronavirus crisis

“We realize freakishly bad economic data is coming,” wrote Fundstrat Global Advisors’ Tom Lee in a Wednesday research note. “On Thursday, some economists are projecting weekly jobless claims to surge to as high as 5 million,” he wrote.

“Many of our more active and tactical clients are short into this, arguing that such wildly bad news cannot be discounted and thus, this ‘tape bomb’ should lead to a big sell-off,” he said.

On Tuesday, BTIG analysts Julian Emanuel and Michael Chu said that if a $2 trillion coronavirus rescue package being voted on by lawmakers late Wednesday wasn’t approved by the time those gut-wrenching numbers come out on Thursday, it would likely knock the wind of the market’s sails.

The BTIG researchers wrote that the “psychology of such a large weekly claims number without a deal done will inflict incrementally larger damage” on an already fragile market.

The Senate late Wednesday approved the relief bill, which is designed to shield the economy from the pandemic that has halted normal business and personal activity.

“The problem is new jobless claims will measure the extent of U.S. policy failure, and with the Congress dilly-dallying, it will not help the matters,” wrote Innes.



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U.S. meeting on Huawei, China policy still on for Thursday despite Trump tweets: sources By Reuters



WASHINGTON (Reuters) – A meeting of U.S. government officials to discuss further curbs on exports to Huawei and China is still on for Thursday, two sources said, despite a pushback from President Donald Trump against stricter limits on shipments of U.S. products overseas.

The deputy-level meeting was called to discuss issues including possible new restrictions on sales of chips made abroad to China’s blacklisted Huawei Technologies and on sales of airplane components to a Chinese aircraft maker.

Policymakers have been sharply divided ahead of a cabinet-level meeting scheduled for Feb. 28, with some officials favoring a tough line on Huawei and China while others are more focused on trade.

Doubts swirled about whether the meetings would move forward after Trump on Tuesday blasted U.S. proposals that would prevent companies from supplying jet engines and other components to China’s aviation industry.

In a series of tweets and comments to reporters, Trump said national security concerns, often cited as the reason for U.S. curbs on Huawei, should not be used as an excuse to make it difficult for foreign countries to buy U.S. products.

The president’s comments came after weekend reports by Reuters and other news media that the government was considering whether to stop General Electric Co (N:) from further supplying engines for a new Chinese passenger jet.

The potential restriction on the engine sales – possibly along with limits on other components for Chinese commercial aircraft such as flight control systems made by Honeywell International Inc (N:) – would have been the latest move in the battle between the world’s two largest economies over trade and technology.

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