The shockingly high number of new jobless claims in the US yesterday has poured icy water on the market's recent rallies, causing the FTSE and other European gauges to open lower. Rising to 3.3 million from only 281,000 last week, the number was at the high end of expectations fuelling concerns about how much worse the situation in the US economy could become before the corona crisis is over.
The most worrying aspect is that at 85,000 corona cases in the US, more than during the whole three months of the outbreak in China, the virus is only beginning to demonstrate its full strength and then only in a few of the US largest cities.
In London, house builders are under pressure after the UK government effectively suspended the property market by banning estate agents from marketing new homes and asking them to stop arranging visits for properties on sale. The move came as a request from banks which were concerned about lending in the current environment.
Travel firms are also struggling as the spread of the virus worsens.
The safe haven assets are yet again thin on the ground and only United Utilities and gold miner Polymetal are trading in the black, by a small margin.
Oil producers in a corner
The irony in the oil market is that in January, at the beginning of the coronavirus outbreak, Russia rejected Saudi Arabia’s suggestion to cut production to bolster the decline in oil price. Russia stalled on its answer and eventually said it would increase its sales in April. Now that prices have more than halved from over $60 to a band between $26-$28 Russia is talking about cutting a deal with OPEC producers to pump less oil from next month. With oil prices at current lows, old hatchets may end up being buried, particularly as the spread of the virus speeds up across the globe. Brent crude is holding just a whisker above $26 which is proving a good resistance level, that has been breached only briefly this week before returning above it.