US Open – Better but still bad jobs data, Focus stays on Stimulus, Oil forms new range, Gold rush continues

US stocks turned positive after better-than-expected weekly jobless claims showed the economy seems to be heading in the right direction again. Initial claims rose 1.186 million, less than the market forecast of 1.4 million, lower than the slightly revised higher prior week reading of 1.435 million and more importantly snapping two straight weeks of increases.  The non-seasonally adjusted initial claims reading also fell 18.5% from the prior to 984,192, the first reading below 1 million during the coronavirus pandemic.  Continuing claims also declined to 16.1 million, but still remain extremely elevated. 

The snapshot of the economy shows improvements that coincide with the trajectory of the virus.  In July, the second wave states saw reopenings hit a roadblock, which should imply that the labor market will improve as the virus spread continues to slow. 

The S&P 500 index seems to have everything going for it to make a fresh record high.  The labor market is improving once again, but at a pace that will still warrant further stimulus.  The Fed has done their part and now all the focus falls on Capitol Hill. 


Another deadline is here for Washington DC and the divide between lawmakers is still huge.  Progress has been made but doubts are creeping a deal will be reached before another week passes.  The size of weekly supplemental benefits will come in somewhere between $400-600 and be extended through December.  Billions also separate what each side wants to allocate toward state and local aid.  Millions of Americans need Congress to act swiftly and the pressure is on both sides to reach a compromise.   

President Trump has threatened to use executive action to get through the stalemate and that could prolong talks, as it will allow Republicans a small safety net.  More stimulus is coming but given some fresh optimism the economy is back on the right track, we could see talks extend beyond the weekend. 


Oil prices jumped higher following better-than-expected jobless claims data.  The US economy seems to be headed in the right direction once again and that should do wonders for crude demand expectations.  A broad decline in jobless claims should only improve as new virus cases continue to decline and it seems COVID-19 deaths might have peaked. 

OPEC’s habitual quota cheat, Iraq noted they will cut output in August by 400,000 bpd for missing its target in prior months.  Iraq has constantly been reiterating they will compensate for their overproduction, so it is widely expected they will deliver some cuts over the next two months. 

WTI crude could be forming a new trading range between $41.50 and $44.50 as crude demand outlooks seem to be steadily improving across the globe.  The uncertainty of the virus spread in the fall however will keep any major rallies capped. 


Gold is surging once again after better-than-expected jobless claims, real yields resume their freefall, and as lawmakers struggle to make further progress on stimulus talks.  A stimulus deal might not be reached before lawmakers’ self-imposed deadline of this week, but no one doubts that it will happen shortly after.  Gold’s outlook is still extremely bullish as Wall Street focuses on the inflationary impact of issuance at the longer end.  Both the Fed and Treasury have made the gold trade an easy one and right now momentum could still support a move toward $2150 over the next week. 

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.