June 25, 2020 - Market Update

Stocks opened lower following the worse one-day skid since June 11 on Wednesday.  U.S. cases of the Coronavirus are increasing and unemployment benefit filings for the week of June 20 have been reported.  Although the total number of filings was greater than economists forecasted, the 1.48 million does fall in line with a consistent drop in claims since late March.  Investors are cautiously optimistic that authorities will not reinstate lockdown measures to avoid additional negative impacts on the economy.  Health officials do not expect an even progress in containing the virus as municipalities have varying methods in deciding on closures, testing, and tracing efforts.  The third and final reading of the first quarter U.S. GDP confirmed the economy contracted at an annualized pace of 5% and orders for durable goods rose 15.8% in May.

Treasury prices are slightly higher this morning, as equities are treading water in early trading.  Labor Department data showed jobless claims fell to 1.48 million from 1.54 million the previous week.  Continuing claims declined by more than expected to 19.5 million the week ending on June 13.  Initial claims under the Federal Pandemic Unemployment Assistance Program totaled 728,120 the week ending on June 20, down from 770,920 the previous week.  While states have eased restrictions on businesses, economists are concerned a resurgence in the virus will impact consumer spending and further inhibit the recovery from deep labor market damage across the country.  Next week’s monthly jobs report is projected to show 3 million workers added to payrolls in June, an increase from 2.5 million in May.