US Economy and Credit Markets Ended April 10, 2020
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The Federal Reserve took massive action last week to limit the damage to the U.S. economy as the impact of the coronavirus continued to be revealed. Initial jobless claims soared for the third consecutive week, with over 6.6 million Americans applying for unemployment benefits the week ending April 4, above the expected 5.5 million. The prior week's claims were revised higher to 6.9 million, bringing the total number of initial claims since broad economic shutdown measures were put in place to about 17 million. Continued claims, which measures the number of people receiving unemployment benefits, reached 7.5 million during the week ending March 28, breaking the record set in 2009 during the financial crisis. Additionally, the University of Michigan's Consumer Sentiment Index recorded the largest drop in the survey's history. The Fed announced sweeping moves on Thursday that would inject as much as $2.3 trillion into the economy, including loans to small and mid-sized businesses as well as to cities and states. The Fed also said it would expand a corporate credit backstop to include companies that have been downgraded to certain levels below investment grade since March 22, prompting a corporate bond rally. Fed Chairman Jerome Powell said the Fed "will continue to use these powers forcefully, proactively, and aggressively until we are confident that we are solidly on the road to recovery." Major economic reports (related consensus forecasts, prior data) for the upcoming week include Wednesday: April 10 MBA Mortgage Applications (N/A, -17.9%), March Retail Sales Advance MoM (-7.0%, -0.5%), March Industrial Production MoM (-4.0%, 0.6%), April Empire Manufacturing (-30.0, -21.5); Thursday: April 11 Initial Jobless Claims (N/A, 6,606k), March Housing Starts (1,317k, 1,599k); Friday: March Leading Index (-7.0%, 0.1%).
Posted on Monday, April 13, 2020 @ 8:35 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.