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Stocks drop as unemployment spikes

By Kirsten Korosec

Stocks fell in regular trading Friday, as all major American indices fell in the wake of a broadly negative jobs report. With more than 700,000 jobs lost in the March data, unemployment in the United States rose from 3.5% to 4.4%.

The markets have been bracing for widespread job losses due to the continued fallout from COVID-19, the disease caused by coronavirus that has prompted local, county and state officials throughout the U.S. and Europe to issue stay-at-home orders. Those directives have forced bars, restaurants, gyms and other non essentials businesses to close.

While the market had expected a wave of job losses, stocks fell as those figures surpassed expectations. Selloffs were further spurred by this troubling recognition: Friday’s figures only account for unemployment-insurance claims individuals filed in the first two weeks of March, before most of the COVID-related layoffs began.

This was unlike Thursday, when negative data led to market gains.

Here are the day’s raw results:

  • Dow Jones Industrial Average: down 1.67%, or 357.99 points to close at 21,055.45
  • S&P 500: fell 1.52%, or 38.34 points, to close at 2,488.56
  • Nasdaq composite: declined 1.53%, or 114.23 points, to close at 7,373.08

Shares of SaaS and cloud companies tracked by the Bessemer cloud index fell as well, while cryptocurrencies were roughly flat in the 24 hours period ending with the close of equity trading.

There were standouts, however. Shares of Tesla held onto some of their after-hours gains recorded yesterday, closing the day up 5.62% to close at $408.01 as the company continued to ride its positive report that it had delivered more vehicles than expected. Bill.com, a recent SaaS IPO managed gains as well, closing the day up 2.71%. It was somewhat hard to find exceptions to the selloff; most companies lost ground in the face of a worse-than-expected economic data.

Every sector saw downward pressure Friday, with the exception of energy and consumer products, which saw a bit of a lift. Oil futures had one of its best days on record, after Russian President Vladimir Putin said global cuts of around 10 million barrels a day are possible.

Airlines were also hit Friday after the U.S. Department of Transportation ordered the industry to provide refunds on any flights that companies had canceled. While airlines stocks recovered, they all closed in negative territory. United Airlines fell 2.28% to close at $22.88, American Airlines declined 6.8% to $9.38 and Delta Airlines dropped 0.88% to $22.48.

US markets shrug off record unemployment numbers as tech shares rise

By Jonathan Shieber

Despite reports of historic unemployment with roughly 6.6 million Americans filing for unemployment, domestic stocks rose during regular trading today.

One day after grim estimates on the potential death toll from the COVID-19 epidemic in the US sent stocks tumbling and amid a continuing economic fallout from the government’s response to slow the spread of the disease, all three major US indices gained.

Meanwhile, the federal government in the US continues to work on the specifics of how to funnel nearly $2 trillion into the American economy as part of the CARES Act stimulus package. And pharmaceutical and medical device companies are working day and night to develop better diagnostics tools and novel therapies to treat the virus while potential vaccines slowly make their way through the regulatory approval process.

Here’s the tale of the tape:

  • Dow Jones Industrial Average: +469.93, +2.24%
  • S&P 500: +56.40, +2.28%
  • Nasdaq Composite: +126.73, +1.72

The tech-heavy Nasdaq rose the least of the major indices, indicating that the up-day wasn’t as bright for the technology industry. This fact was underscored by a selloff among shares of SaaS and cloud stocks, as measured by the Bessemer cloud index that fell 1.4% on the day. The Nasdaq remains in bear market territory.

After-hours today, shares of Tesla shot higher after the electric car company announced delivery numbers that delighted investors. The volatile company announced 88,400 deliveries for the three-month period, ahead of expectations of 79,900 per FactSet.

Looking ahead, it doesn’t feel like the market has digested the scale of economic impact that the new unemployment claims implies; with employment falling sharply, demand contracting, and economies around the world prioritizing safety over commerce, the world could be in for more than an economic pause, or lull. We may be staring down the first weeks of a depression.

Stocks fall sharply as US government warns of hard weeks ahead

By Kirsten Korosec

A recent redbound in domestic equity prices faded further into the distance today, as American stocks fell for a second consecutive day following modest Tuesday declines.

After rising from new 52 week lows, all domestic indices after the American president warned of difficult weeks ahead as the country reels from the economic and social impacts of COVID-19. The day’s trading left stocks down heading into Thursday, when a new unemployment claim number is expected.

Some are anticipating a worse number than last weeks 3.3 million claims, a result that was historic in size. If tomorrow’s report is as bad as some expect it would underscore the scale of economic damage the country endures as it seeks to stem the spread of COVID-19 after an initially slow national response that has since splintered into a patchwork of state-led efforts. Many Americans are staying home, a condition that could persist for weeks or months, exacerbating economic damage.

Here’s the day’s results:

  • Dow Jones Industrial Average: -973.65, -4.44%
  • S&P 500: -114.09, -4.41%
  • Nasdaq Composite: -339.52, -4.41%

Shares of SaaS and cloud companies, as tracked by the BVP Nasdaq Emerging Cloud Index fell 4.83% today. As with the broader technology industry, SaaS firms saw their shares fall sharply before recovering some; and, like their industry peers, they are now trending down yet again.

Pressure on automakers

The Big Three Detroit automakers GM, Ford and Fiat Chrysler Automobiles also saw stocks slide after reporting first quarter sales declines. GM reported a 7.1% drop in sales in the first three months of the quarter ended March 31 compared to the same year ago period. FCA reported a 10.4% decline in sales. Ford is expected to report its quarterly sales numbers on Thursday. Tesla, which saw its shares fall 8.1% to $481.56, is expected to report deliveries this week.

GM shares fell today 7.31% to $19.26, while FCA saw its price drop 5.15% to $6.82.

GM and FCA were hardly the only automakers to see a drop in sales caused by falling demand for cars, trucks and SUVs. Hyundai, Nissan and Porsche also reported declines.

With the close of a turbulent Q1 behind us, we are not yet free of the first three months of 2020. Earnings season looms, and with it an endless retrace of the outbreak of the pandemic domestically, as sketched by the numbers of domestically-listed companies. For some firms Q1 numbers will prove a bonanza. For most, however, they will likely show the opposite. So get ready for another quarter of confusion, it’s going to be a long three months.

Stocks post worst quarter since 2008 financial crisis

By Kirsten Korosec

The first quarter of 2020 ended with a whimper — with the Dow Jones Industrial Average, S&P 500 and Nasdaq posting their worst quarter in decades — as the COVID-19 pandemic continues to cause uncertainty and volatility across all major stock market indices.

At the beginning of the quarter, we were still basking in a decade-long bull market. The global pandemic, and the economic havoc it caused, put an end to those halcyon days. All major American indices dropped into bear-market territory March 12, after shedding the requisite 20% from recent highs.

The roller coaster continued, with equities bumping along the bottom, periodically popping up, only to fall again as the epicenter of the pandemic shifted from China to Europe and now the United States. The number of cases in the U.S. has prompted states to issue stay at home orders, putting the brakes on business as usual. As a result, unemployment benefits have skyrocketed. Last week alone, around 3.3 million Americans filed for unemployment benefits, dwarfing numbers set during the 2008-era economic meltdown.

The economic stimulus bill, known as the CARES Act, along with a series of actions taken by the Federal Reserve, have provided some lift. But the volatility continues. For the quarter, Dow Jones is down 24.08%, while the S&P is down 20.67% and Nasdaq is off 15.3%.

Here’s the breakdown of what happened today:

  • Dow Jones Industrial Average: declined 1.85%, or 413.11 to 21,914.37
  • S&P 500: slid 1.61%, or 42.18, to 2,584.47
  • Nasdaq Composite: fell 0.95%, or 74.05, to 7,700.10

All sectors were down today, with the exception of the energy sector, which saw a lift after being battered for weeks. Meanwhile, investors have fled equities for treasuries, pushing yields down. Case in point: U.S. 10-year yields are down 64% in the first quarter.

SaaS shares fell more than most tech equity in today’s trading, with the Bessemer cloud index off a little over 2.5%. The index, which tracks a basket of SaaS and cloud shares, is off around 20% from its recent highs. Shares of modern software companies are therefore still technically in a bear market, though just. If recent gains hold, the index will have made up around 10% of its lost ground since recent lows.

Wrapping on cryptocurrencies as we close the book on the quarter, bitcoin posted a net loss for the period. It’s worth just over $6,400 as we write this post.

What a quarter. What a quarter of surprises and turmoil and cut expectations and downgraded hope. Here’s to a better Q2, if we can manage.

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