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Dow Jones: After Sanders’ Boost, Watch Out for Payroll

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  • The Dow Jones Industrial Average Index and the S&P 500 rose 3.4% on Wednesday. US stock markets outperformed global markets after Bernie Sanders withdrew from the 2020 presidential race.
  • Meanwhile, futures point to a weak opening today. The US initial jobless claim data should be released later in the day. The data will likely show more of COVID-19’s financial impact.
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Dow Jones futures today

The Dow Jones futures are pointing to a weak opening. Notably, US stock markets have bounced back sharply from last month’s lows. However, they’re still below the all-time highs that they hit in February. US stock markets closed with strong gains yesterday even though most global markets were either flat or traded with a negative bias. US stock markets’ relative outperformance yesterday was largely due to Bernie Sanders withdrawing from the 2020 presidential race. Some of Sanders’ proposed economic policies concerned market participants. Notably, when US stock markets started to fall in February, President Trump blamed the Democrats. Read Dow Jones Crashes, Trump and Gundlach Blame Democrats to learn more.

US stock markets

Meanwhile, the Dow Jones (NYSEARCA:DIA) and the S&P 500 (NYSEARCA:SPY) look like they will open on a weak note today. The initial jobless claims are scheduled for 8:30 AM ET today. We will see the March non-farm payroll data tomorrow. The data points will show COVID-19’s financial impact. While the coronavirus started as a health crisis, the financial repercussions have been severe. Many leading institutions expect a global recession this year. US stock markets have rallied sharply from last month’s lows due to the stimulus and rate cuts. However, the stimulus will leave a big hole in the US government’s finances. The fiscal deficit, which is high by historical standards, will likely reach levels last seen in the 1940s amid World War II.

Dow Jones Index and COVID-19

Boeing (NYSE:BA), the largest Dow Jones constituent, has fallen by more than 54% this year. COVID-19 has amplified the company’s troubles. The aviation sector has been hit hard by the COVID-19 pandemic. Recently, Berkshire Hathaway (NYSE:BRK.B) trimmed its stake in airline stocks. Chairman Warren Buffett gradually built stakes in leading airline companies. Currently, Apple (NASDAQ:AAPL) is Berkshire Hathaway’s largest holding. Berkshire Hathaway stock underperformed the Dow Jones Index and the S&P 500 last year despite Apple’s stellar returns. Read What Did Warren Buffett Buy in Q1 as US Stocks Crashed? to learn more.

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