Jobless claims, Lockdown #2 and earnings season ahead

10 Jul 2020

From the point of macroeconomic statistics, the main event of yesterday was the publication of weekly data on jobless claims in the United States. New applications were submitted by 1.3 million, while the total number of unemployment beneficiaries is still above 18 million.

What these numbers are talking about is basically: there is no quick economic recovery. Recall that the labor market is one of the most sensitive segments, and weekly jobless claims are in fact the most closest to real-time data, and they say that a month after the start of the reopening of the US economy, the situation in labor market continues to be unprecedentedly bad.

So we continue to swim against the tide and recommend sales in the US stock market. Well, recall that the earnings season in the United States starts next week, which will almost certainly be the worst for all time observations. It will be extremely interesting to observe the actions of bulls in the US stock market. How easy will it be for them to buy at historic highs when companies report a fall in profits of 50% or even 100%, as well as a two-digit decrease in revenue.

And let’s not forget about the pandemic. The number of new cases in the world yesterday showed a new absolute maximum. The situation in the USA continues to raise concerns of “lockdown No. 2”: for two consecutive days, the number of new cases there has exceeded 60K. According to the chief infectious disease specialist Faucci, the situation is developing exponentially again, which means that his forecast of 100K, announced last week, remains relevant.

Our trading positions for today are unchanged: we are looking for points to buy the dollar, especially against the British pound, we will sell in the stock markets, as well as in the oil market.