The more the cases of coronavirus, the more the economic situation worsens. As scientists are trying to come up with a COVID-19 vaccine, the virus gets more tricky and stubborn challenging even the experts. Since cases surged around the globe, the economic situation of the globe has been in economic tension. Many people have lost their jobs due to the inability of companies to sustain their expenses. This job loss among other negative factors has made the economy go down affecting the stock market and businesses’ performance.
However, earlier this month the US stock market and the CSI 300 stock index experienced a significant gain. Investors thought that the situation in the US might have started stabilizing as they were planning to reopen the economy. This is not the case as the cases are increasing, affecting the economy and the stock market, therefore, calling for a re-lockdown measure.
Economic tension and the Dow Jones Industrial Average
The Dow Jones is a stock market index that evaluates the single-stock performance of over 25 firms on the stock exchange in the US. Investors consider the DJIA to be an insufficient version of the whole United States market in comparison to the S&P 500 index. On 9th July 2020, as the Dow Jones opened, it recorded a significant drop.
Dow Jones Downfall As Unemployment Claims Still Surge
Amongst the American stock market indices, only the Nasdaq Composite recorded a gain. The Dow Jones and the S&P 500 recorded a loss. Dow dropped over 350 points to 25712.92, S&P 500 lost less than 1% to 3153.03. the Nasdaq increased by 0.47% to 10541.58.
Over 1 million Americans have filed jobless claims amid the reopening of the country’s economy.
James Knightley says:
“Unfortunately, we do not expect to see meaningful drops from these large numbers anytime soon. High-frequency information from Homebase suggests that employment gains are already plateauing as the spike in cases has led several states to strategize. Some announced renewed containment measures while other states delay their phased re-opening.”
Dr. Fauci is in for a Lockdown Conjecture
Dr. Anthony Fauci is the White House’s disease specialist. He advises the states with surging outbreaks of the virus to consider lockdowns. Predictions are that California may experience an increase in hospitalizations while LA has reached a crucial point regarding COVID-19. Some markets have already started considering the lockdown measures as we see a 3% drop in the price of crude oil.
The Boeing Under Scrutiny as Walgreen Loses
The Boeing firm has been posting controversial headlines since March and it seems they have more bad headlines. The 737 Max order book took a stop knock and the FAA is looking into Boeing’s case. The BA stock plunged over 3% but less than 5%. Raytheon Tech dropped 4.4%. As for the case of Walgreens, its stock is 8% down due to the losses and mass layoffs.
Despite the dark side of the stock market, we see some firms recording market rallies. Walmart increased 2.75% whereas Cisco System recorded a gain of about 2.5%.