New York Stock Market Plummets Amid Weak Economic Indicators and Corporate Earnings

CB Consumer Confidence Index Falls Again
Focus on Unemployment Benefits Expansion Negotiations and Fed Response

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market is showing weakness due to the decline in U.S. economic indicators and corporate earnings.

On the 28th (local time), the Conference Board announced that the Consumer Confidence Index for July was 92.6. This figure not only fell short of the expert forecast of 94.5 but also underperformed the previous month's 98.3. The Consumer Confidence Index had rebounded in May and June after a sharp drop caused by the COVID-19 pandemic but has turned weak again.

The Consumer Confidence Index is a representative indicator that can predict consumer activity, which accounts for two-thirds of the U.S. economy. A high figure indicates that consumers view the future economy optimistically, while a low figure suggests a negative outlook.

With the continued resurgence of COVID-19 and concerns over economic slowdown, the expiration of the expanded weekly $600 unemployment benefits at the end of this month is expected to reflect a potential consumption cliff.

The U.S. Republican Party has proposed paying unemployment benefits up to 70% of income in the fifth stimulus bill but is pressing to limit payments to $200 until state income verification systems are operational. Meanwhile, the Democratic Party emphasizes maintaining the $600 payment, making early bipartisan agreement difficult.

Corporate earnings announced on the same day were also below expectations. McDonald's and 3M reported net profits that disappointed the market.

As the Federal Reserve (Fed) begins its two-day Federal Open Market Committee (FOMC) meeting, attention is focused on what measures will be taken regarding the current economic situation. Wall Street is raising the possibility of proactive guidelines and the introduction of yield curve control policies. The Fed announced it would extend various emergency lending programs, including the Main Street Lending Program, originally scheduled to end in late September, by three months until the end of December.

With negative factors continuing, the New York stock market is uniformly showing weakness. As of 10:30 a.m., the Dow Jones Industrial Average is down 0.45%, the S&P 500 index is down 0.18%, and the Nasdaq index is down 0.45%.