Stocks slammed as sentiment worsens

Global stock indices were down 2-3% on Thursday, and they continued to slide since Tuesday’s reversal as there has been some bad news for investors, and the Fed failed to inspire more buying in the overbought markets. 

According to the latest data, in the last week, 1.542 million more Americans filed for unemployment benefits for the first time (slightly better than the 1.55mm expected). That brings the twelve-week total to 44.21 million, dramatically more than at any period in American history. The four-week average fell from 2,288 million to 2,00 million.

Continuing claims ticked lower to 20.929 million, from 21.268 million previously. 

The greenback held tight after these numbers, but equities dropped to new session lows. 

From other news, the Fed disappointed market participants yesterday. According to analysts, it was one of the most dovish Fed statements in history. It was also not enough to offset the Fed’s gloomy and uncertain outlook, which sees unchanged rates until 2022 and an economy that fails to recover its 2019 highs for at least three years. As a result, global stocks dropped the most in five weeks, and US equity futures tumbled.

What is worse is the fact that there seems to be an uptick in COVID cases in many US countries, which is igniting the fears of the dreaded second wave.