1. Dow set to drop ahead of jobless claims data
The S&P 500 jumped over 2.6% on Wednesday, and with one day left in April the index was up 13.7%, tracking for its best month since October 1974. The Dow was on pace for its best month since January 1987. The Dow, while still about 17% away from its February record, gained 35% from its March coronavirus low. The S&P 500 remained just over 13% away from its February all-time high but rose 34% since its March low.
2. Coronavirus-driven job losses could reach 30 million
A man walks past a sign in front of the US Department of Labor amid the coronavirus pandemic on April 29, 2020, in Washington, DC.
Olivier Douliery | AFP | Getty Images
Jobless claims are continuing to soar at an unprecedented pace, with another 3.5 million Americans expected to have filed for first-time unemployment benefits for the week ended April 25. When the Labor Department releases the data at 8:30 a.m. ET, the total number of claims filed by furloughed and laid off workers could reach at least 30 million in the latest six-week reporting period. As of last week, all the job gains since the Great Recession were wiped out. The Federal Reserve, following its two-day April meeting and already embarking on historic stimulus measures, pledged to keep interest rates near zero until full employment and inflation return.
3. Twitter, McDonalds, American lead before-the-bell earnings
The deluge of companies reporting financial results from the first three months of the year continued Thursday morning, with Twitter reporting better than expected first-quarter earnings and revenue despite an expected hit to its online ad business due to the coronavirus crisis. Monetizable daily active users also exceeded estimates. Shares of Twitter gained 5% in premarket trading. Tech giants Apple and Amazon are set to report earnings after the bell.
Dow stock McDonalds on Thursday morning reported mixed first-quarter results, missing estimates on the bottom line as coronavirus mitigation measures forced a shift to drive-thru, delivery and takeout only. However, the fast food chain beat expectations on revenue. McDonalds said it’s suspending its stock buyback program, boosting its cash position and reducing planned capital expenditures.
American Airlines lost more than $2.2 billion in the first three months of the year — its biggest quarterly loss since 2008 —as the pandemic drove down demand for air travel. On a per-share basis, American reported a worse than expected loss and lower than expected revenue. U.S. airline travel volumes have dropped about 95% in recent weeks from a year earlier as travelers stay home.
4. Musk goes off on orders to stay home
Tesla CEO Elon Musk lashed out at state stay-at-home orders as “fascist” in an expletive-laced rant on the electric auto maker’s earnings call late Wednesday. Musk called shelter in place measures “forcibly imprisoning people in their homes against all their constitutional rights” and “breaking people’s freedoms in ways that are horrible.” Tesla put near-term earnings guidance on hold after posting an unexpected first-quarter profit and slightly better than expected revenue.
Facebook CEO Mark Zuckerberg said on the social network’s Wednesday evening earnings call that he remains concerned that the economic fallout of the coronavirus crisis will last longer than people think. Facebook reported lower than expected first-quarter earnings but better than expected revenue, saying online advertising sales stabilized in recent weeks after a significant downturn.
Dow stock Microsoft said the Covid-19 outbreak had minimal impact on revenue and it saw increased business in a number of its cloud-based segments. The tech giant reported better than expected fiscal second quarter earnings and revenue. Other significant developments in the quarter included the unveiling of new Surface devices and the announced acquisition of data migration start-up Mover.
5. Trump to allow federal social distancing guidelines to expire
U.S. President Donald Trump listens during a meeting at the White House in Washington, D.C., U.S., on Wednesday, April 29, 2020.
Stefani Reynolds | Bloomberg via Getty Images