Non-farm payroll reports showed that the U.S. unemployment rate hit 14.7 percent in April, crushing the post-World War II record of 10.8 percent hit in November 1982 – and analysts believe that the rate will continue to rise in the coming months. 20.5 million jobs were lost in April, the biggest monthly job loss in history.
Disney and General Motors both reported that coronavirus decreased their earnings by 1.4 million dollars. Many companies, especially in the retail sector, filed for bankruptcy protection.
Treasury Secretary Steven Mnuchin commented over the weekend that the White House was weighing more economic stimulus measures. Congress has already passed legislation providing for $3 trillion of stimulus to respond to the pandemic, including money paid directly to taxpayers and loans to small businesses to be used for payroll expenses. "We just want to make sure that before we jump back in and spend another few trillion of taxpayers' money that we do it carefully," Mnuchin said. "We've been very clear that we're not going to do things just to bail out states that were poorly managed."
Market Movements
U.S. stock markets plowed higher on Friday despite the dismal job reports, boosted by expectations that gradual economic reopening in both the U.S. and abroad. Dow futures pointed to a strong opening on Monday as well, with expectations of an open around 200 points higher to start the week. Asian markets were mostly higher on Monday afternoon in Asia, with Japan's Nikkei 225 jumping 1.47 percent as of 1:35 p.m. HK/SIN, and Australia's ASX 200 up 1.51 percent. Hong Kong's Hang Seng Index surged 1.64 percent. Only China's benchmarks traded lower as concerns about continuing tensions between the U.S. and China continued.
Oil prices failed to respond to the increased optimism that sent stock benchmarks higher, and both Brent crude futures and U.S. WTI were both lower on Monday afternoon. Brent crude futures fell 1.45 percent to $30.55 per barrel, and U.S. WTI eased 1.29 percent to $24.42 per barrel. The pressure on the oil markets came on concerns of a second wave of coronavirus infections in northeast China and South Korea, as a rise in new cases caused investors to question whether reopening measures would need to be rolled back. South Korea saw 35 new cases on Sunday, up from single-digit daily diagnoses in the past few weeks.
On the currency markets, the U.S. dollar strengthened against the yen, up 0.28 percent to 106.95. The dollar eased against most of its other primary trading partners, including the Canadian dollar and the pound. The greenback was flat against the euro.