Stock futures sink as COVID-19 shutdowns cause historic U.S. contraction

Wall Street’s main indexes were set to open lower on Thursday after data confirmed the U.S. economy in the second quarter suffered its steepest contraction since the Great Depression due to COVID-19 shutdowns. Second quarter U.S. GDP numbers revealed a record 33% contraction.

The Labor Department said initial weekly jobless claims last week came in at 1.434 million, slightly better than expectations as economists polled by Dow Jones foresaw 1.45 million. It was the 19th straight week in which initial claims totaled at least 1 million and the second consecutive week in which initial claims rose after declining for 15 straight weeks.

Medha Singh and Devik Jain for Reuters:

Gross domestic product collapsed at a 32.9% annualized rate last quarter, a Commerce Department report showed, as business activity came to an abrupt halt due to efforts to slow the virus outbreak.

Corporate earnings have tended to be better than expectations so far, but the scale of the economic damage from the crisis, and likelihood that it will drag on are again giving traders pause for thought.

Apple Inc, Amazon.com Inc, Alphabet Inc and Facebook Inc will post results at the same time for the first time later on Thursday… Shares of the companies, which have a combined market value of about $5 trillion or almost a fifth of the whole S&P 500, fell between 0.4% and 0.9% in premarket.

MacDailyNews Take: We’re lucky the Q2 U.S. contraction wasn’t worse!

MacDailyNews Note: Apple will report fiscal Q3 2020 earnings for the three months ending in June on Thursday, July 30th after market close (we’ll have Apple’s results for you that day right around 4:30pm EDT / 1:30pm PDT, as usual). We’ll also be covering Apple’s conference call with analysts with live notes starting at 5:00pm EDT / 2:00pm PDT.