Stock Market Today: Record Day for Oil, Jobless Claims

It was a very interesting session in the stock market today. That’s as the SPDR S&P 500 ETF (NYSEARCA:SPY) spent most of the day in positive territory and ended higher by 2.4%. That’s despite a record-setting initial jobless claims report.

Stock Market Today

The U.S. reported 6.65 million jobless claims, roughly double what economists were expecting. That’s also more than double the 3.3 million claims from last week (which was also a record).

How Bad Is That?

To put this situation into context, roughly 500,000 Americans filed for first-time unemployment benefits in the first two weeks of March. In the second two weeks, 20 times that figure had applied, or roughly 10 million people. We can only expect that the next few weeks will also be ugly, as more counties and states enter or remain in some form of lockdown.

Around 2% of the workforce (which is roughly 164 million people), put in an unemployment claim two weeks ago, and about 4% put a claim in last week. The ripple effect won’t be good for GDP, consumer sentiment and a whole host of other economic readings. More important will be how the market handles these numbers, though.

Oh, and don’t forget, we have the non-farm payrolls report on Friday morning before the open.

Black Gold

Crude oil prices settled higher by $4.43 at $24.74 per barrel. The 22% surge was a record day for the commodity, which has come under tremendous pressure this year.

Demand has been in free-fall, as the novel coronavirus stifles the global economy. Adding insult to injury has been a price war among OPEC members. It’s resulted in a flood of oil supply, which is only adding the price decline.

President Donald Trump told CNBC that he spoke with both Vladimir Putin of Russia and Saudi Arabia’s Crown Prince Mohammed bin Salman. Trump expects them to announce a joint decision to cut daily production by 10 million to 15 million barrels. Saudi Arabia is reportedly calling an emergency meeting as of now, but there are rumors galore about what type of outcome will come of the reports.

Movers in the Stock Market Today

Amazon (NASDAQ:AMZN) is pushing to release its first in-house created video games next month, and continues investing heavily to create its own games. The company aims to become a game developer and distributor with the release of its first game, Crucible. Not only is Amazon working on a cloud-gaming platform, but it’s also launching a multiplayer online game, New World, next month.

Following the dismal numbers from General Motors (NYSE:GM) and Fiat Chrysler (NYSE:FCAU), Ford (NYSE:F) reported its quarterly sales figures too.

Like its peers, sales are plummeting, down 12.5% in the first quarter to 516,330 vehicles. The company saw truck sales down 5.4%, SUV sales down 11% and car sales down 36%. With this massive drop in auto sales, JPMorgan cut its full-year earnings estimates from $1.05 per share to a loss of 65 cents per share.

Next up? Tesla (NASDAQ:TSLA).

Food Stocks Take a Hit

Due to the coronavirus, Shake Shack (NYSE:SHAK) sales are taking a big hit. “Compared to last year, excluding Shacks that are temporarily closed, sales across our domestic company-operated Shacks are currently down between 50% and 90%, averaging down approximately 70% in total,” CEO Randy Garutti said in a release.

As of now, the company says the coronavirus has not impacted its supply chain. And Shake Shake plans to ramp up its delivery business as much as possible.

Luckin Coffee (NASDAQ:LK) is slumped roughly 75% after acknowledging accounting discrepancies. Jian Liu, Luckin’s COO, along with several of the company’s employees falsified up to $310 million of transactions. An independent special committee was created for the internal audit issues, but the damage is big.

Is the selloff overdone?

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.

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