U.S. economy suffers record drop in second quarter
Economists: US GDP fell 34.1% year on year
The U.S. economy is estimated to have suffered its biggest losses since the Great Depression
US stocks are in decline on Thursday, while investors are anxiously awaiting the release of Q2 GDP data, which will likely confirm that the coronavirus pandemic is causing the nation’s worst economic slowdown since the Great Depression..
Economists polled by Reuters estimate that GDP likely fell 34.1 percent year-on-year in the last quarter as business activity halted sharply due to quarantine measures..
The first signs of increased activity sparked a surge in US equity markets, but the pace of economic recovery appears to have slowed recently amid rising new infections, especially in the southern and western states of the United States..
Index S&The P 500 is now about 4 percent behind the February 19 record. Last week the gap was 3 percent.
The Commerce Department’s report is expected at 8:30 am ET (12:30 pm GMT). The department will also provide data on the labor market, which is expected to show an increase in the number of applications for unemployment benefits over the past week..
The US Federal Reserve on Wednesday acknowledged that the rise in COVID-19 cases is likely to slow economic recovery. The Fed has pledged to support the economy as long as necessary, which boosted the top three Wall Street indices at the end of the trading session.
Investors’ sentiment is also darkened by the lack of progress in congressional talks on a new economic aid package, as the $ 600 a week jobless supplement expires on Friday..
In addition, on Thursday, the four largest U.S. tech companies – Apple, Amazon, Alphabet and Facebook – will publish their financial results on the same day for the first time..
Shares of companies, which have a combined market value of about $ 5 trillion, lost 0.6 to 0.9 percent ahead of trading. CEOs of four companies faced criticism on Wednesday from antitrust lawmakers.
As of 6:16 am ET, e-mini Dow futures are down 221 points, or 0.84 percent, S & The P 500 went up 28.75 points, or 0.88 percent, and the Nasdaq 100 went up 104 points, or 0.97 percent.
Qualcomm shares jumped 11.5 percent after publishing its fourth-quarter revenue forecast, which significantly exceeded expectations thanks to sales of chips used in 5G devices and an agreement with China’s Huawei.