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U.S. Stock Futures mixed as jobless claims rise

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09/24/2020 | 08:59am EDT

U.S. stock futures were down in pre-market trading amid disappointing fresh unemployment-claims data, while Europe takes new restrictions to fight the surge in coronavirus cases.

The presidential election is also creating some uncertainty and volatility, with Donald Trump claiming yesterday that he wouldn't commit to a peaceful transfer of power if he were to lose the election.

The latest data on new jobless claims for the week ended Sept. 18 shows that the number of workers applying for jobless benefits reached 870,000, which is 10,000 more than the previous week. Economists expected applications to be down to 850,000.

The US stock market retreated yesterday, weighed down by oil and technology stocks, a rather unusual combination. While the European places knew a relatively benign Wednesday, Wall Street slipped throughout the day, to close at the bottom of the session: the Nasdaq 100 lost more than 3%, erasing of its rebound at the beginning of the week. The amplitude of the closing variations illustrates very well the increase in investors' nervousness.

Investors are still waiting for a stimulus plan in the United States. In a speech to the House of Representatives, US Central Bank President Jerome Powell once again - and this came as no surprise at all - urged parliamentarians to agree on new economic support measures. The likelihood of a compromise before the presidential election scheduled in 40 days is quite low. It remains to be seen whether the United States will be governable afterwards.

In Europe, some lockdown restrictions are back at the local level, as is the case in France in the Marseille area. The ECB is setting up a platform that would allow investors to acquire depreciated debt, to broaden the spectrum of bearers and help irrigate the economy. Currently, the majority of portfolios of this type of debt are bought by giants such as Cerberus, Goldman Sachs or Blackstone. The objective is to offer smaller tranches and attract other players.

According to a Bloomberg statement, euro zone banks are preparing to receive a new dose of cheap financing this Thursday. This new tranche of TLTRO will allow banks to borrow new money at negative rates, up to -1% in this case. In other words, this means that the ECB is paying the banks to borrow. In return, they commit to lending capital to businesses and households.

Confidence indexes are on the agenda today for France and Germany. In the United States, weekly unemployment figures are followed by figures for old property.

Stocks mentioned in the article
ChangeLast1st jan.
DJ INDUSTRIAL -1.44% 28195.42 Delayed Quote.0.24%
NASDAQ 100 -1.84% 11634.348573 Delayed Quote.35.72%
NASDAQ COMP. -1.65% 11478.882835 Delayed Quote.30.08%
S&P 500 -1.63% 3426.92 Delayed Quote.7.83%
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