They may not have any other option left but to file for bankruptcy, and this can lead to stock selloffs. Since many corporations have been able to minimize the damage caused by the coronavirus pandemic by ballooning their balance sheets with debt, any further lockdown or restrictive coronavirus measures will weaken their balance sheet.
bankruptcy filings in 2020 surged to their biggest number since 2009. This is really critical, and neglecting this is likely to catch stock traders off guard, and that may lead to a stock crash. We had already seen a small episode of this at the beginning of this year, precisely on January 4 when the Dow Jones stocks tanked.Īnother important factor that needs stock traders’ attention is the number of bankruptcies taking place in the U.S. Basically, the longer it takes for governments to vaccinate the public, the greater the uncertainty. Vaccine distribution has ramped up more slowly than expected, and it is likely to take some time before a meaningful population will get the first dose. Hence, under the current circumstances, it is going to be really difficult for the Dow to continue its massive bull run-reality will catch up, and the stock bubble is likely to burst. Of course, this was building up for some time, and the weekly Unemployment Claims number is warning us about this.
ADP Employment number came in at -123K, against the forecast of 60K while the previous number was at 304K. The labor market recovery that pushed stocks higher and made stock traders more optimistic about the stock market rally isn’t the same. labor market has taken a wrong turn and more people are losing jobs once again-although yesterday’s number was better than expected, actual 787K vs.
Weekly Jobless Claims have started to show that the U.S.
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