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Daily Insights

Daily Insights

| November 19, 2020

Virus concerns mount. Stocks opened slightly lower this morning as COVID-19 spread has increased concerns that the economic recovery may be knocked off track by additional restrictions and changing consumer behavior.

  • The S&P 500 Index is poised for its third straight decline.
  • Asian markets were mixed overnight, with China a standout to the upside.
  • European markets were lower in midday trading.

Jobless claims higher than expected. After several weeks of improvement, weekly jobless claims spiked (source: US Department of Labor).

  • 742,000 Americans filed for unemployment insurance, above Bloomberg estimates for 700,000.
  • Continuing claims beat estimates, coming in at 6.37 million versus estimates of 6.4 million.
  • The rise in jobless claims comes as several areas of the country begin to tighten restrictions amid rising COVID-19 cases.

Global growth momentum starting to wane. Global leading economic indicators (LEI) improved month over month from May through October as countries re-opened. However, “lockdown 2.0” with fresh restrictions in Europe and the United States is threatening the near-term outlook. A double-dip recession in Europe is possible, while US growth may stall while we wait for vaccines. We look at high-frequency economic indicators in Europe to gauge the effects of the latest round of COVID-19 lockdowns in the LPL Research blog.

Technical update. Stocks closed at session lows on Wednesday, with the S&P 500 moving from a slight gain at the open to a more than 1.1% loss. The energy sector’s 2.9% loss led to the downside, but all 11 sectors were lower on the day. The S&P 500 fell back below its September highs, closing at 3567, and will look to remain above last week’s low print of 3511 as we head into the final two days of this week.

COVID-19 news. Case growth in the United States continued to slow as the 13.7% week-over-week increase was the second smallest in November; the 25.7% increase in the seven-day average was the slowest in two weeks (source: COVID Tracking Project).

  • Hospitalizations rose 35% week over week, pushing the seven-day average 18.6% higher.
  • Deaths in the United States attributed to COVID-19 have surpassed 250,000.
  • New York City public schools have temporarily moved to full-time remote learning.
  • AstraZeneca’s vaccine candidate showed strong immune response in older adults in an early study.



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