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The Dow Jones today will slide on rising unemployment numbers as a result of the coronavirus lockdown. See the numbers below.
The pullback comes despite earnings from some of the technology sector's top performers, like Microsoft Corp. (NASDAQ: MSFT) and Facebook Inc. (NASDAQ: FB). Investors continue to cheer as the markets look to close out their strongest month since 1974 on Thursday.
We'll dive into these stories and more in a moment. But first, here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now, let's take a look at the most important market events to start your day.
The Top Stock Market Stories for Friday
- This morning, all eyes are on the U.S. Department of Labor as it reports the latest figure on unemployment benefits across the United States. This week, we could see as many as 30 million people seeking unemployment benefits across America. The news comes a day after U.S. Federal Reserve Chair Jerome Powell warned that we are facing the worst economy in history. Powell said after the two-day FOMC meeting that Americans can expect to see terrible economic data during the second quarter. He also said that the Fed is prepared to provide more liquidity to the market and suggested that small businesses may need additional funding to keep their lights on.
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- Meanwhile, the official number of coronavirus cases around the globe topped 3.2 million, with the U.S. currently sitting at 1.04 million. In the United States, roughly 61,000 people have died due to COVID, and the figure now outpaces the loss of American lives during the Vietnam War. Around the globe, Italy is moving to reopen its economy, with Prada saying it will restart production after two months of shutdown. However, Japan has announced it will extend its state of emergency for at least another month.
- Finally, oil prices ticked higher on news that the expected glut of crude oil is not rising at the rate that many analysts had expected. WTI crude futures added 15.7% after a 22.2% gain on Wednesday. The Energy Information Administration said yesterday that U.S. inventory levels increased by 9 million barrels, a sizeable miss from the 10.6 million expected by analysts. U.S. gasoline stockpiles also declined from record levels in the previous week. That said, we are still looking at storage concerns around the globe. The International Energy Agency has warned that global capacity may strike for storage around June due to a record 6% decline in energy demand this year.
Stocks to Watch Today: TPR, MCD, FB, TSLA
- Shares of Tapestry Inc. (NYSE: TPR) gained 1.5% this morning despite news that the retailer's stores experienced a 20% drop in quarterly sales. Tapestry had closed roughly 90% of its retail locations due to the COVID-19 outbreak. The firm also reported a net loss of $677.1 million or negative $2.45 per share. That is far wider than what analysts had expected. During its earnings call, the CEO said that "no one is immune from the effects of a 100-year storm."
- Shares of McDonald's Corp. (NYSE: MCD) were flat after the fast food giant reported earnings on Thursday. The firm reported earnings per share of $1.47, a figure that was 17% lower than the same period in 2019. The sharp decline in sales complemented restaurant closures across the world. Wall Street had expected EPS of $1.56. However, the firm experienced a global same-store sales decline of 3.4% during the first three months of 2020. In the United States, March same-store sales fell by 13.4% due to shelter-at-home orders and social distancing guidelines. Finally, McDonald's withdrew its 2020 outlook.
- Shares of Tesla Corp. (NASDAQ: TSLA) are in focus thanks to its CEO's latest comments on the lockdown. During the earnings call for Tesla, Elon Musk called government stay-at-home orders fascist and warned about the company's ability to resume its production at its California-based manufacturing plants. Musk said that the government was "forcibly imprisoning people in their homes against all their constitutional rights."
- Shares of Facebook Inc. (NASDAQ: FB) rallied more than 9% after the social media giant reported stronger-than-expected earnings Thursday. Although the company reported a "significant" decline in advertising revenue, it said that sales remained healthy during the first three weeks of April. The firm also reported that daily active users on the platform hit 1.73 billion people during the first quarter. Its monthly active user figure hit a new record of 2.99 billion across its full suite of applications.
Why Startups Can Have an Edge During a Recession
Uber, Airbnb, Slack, Pinterest, and Venmo have something big in common – something other than their big names.
These startups were founded during the last recession.
And now, some of the most iconic companies of our time could launch into Fortune 500s during days like today.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.