Futures for the stock index turned positive Thursday as claims for unemployment benefits fell much faster than expected for the first time, but gains remained suppressed as investors checked a stalemate between Congress Democrats and the White House over a package of coronavirus.
What do key benchmarks do?
Futures on the Dow Jones Industrial Average YM00,
were up 21 points, or 0.1%, at 27,887, while S&P 500 futures ES00,
rose about 3 points, as 0.1%, to 3,373. Nasdaq-100 futures NQ00,
were up 56 points, or 0.5%, at 11,182.
The Dow on Wednesday DJIA,
rose 289.93 points, or 1.1%, to end at 27,976.84, while the S&P SPX,
advanced 46.66 points, or 1.4%, to close at 3,380.35, less than 0.2% below its record high of 3,386.15 on February 19th. The benchmark for large chickens traded up to 3,387.89 in late trading. The Nasdaq Composite COMP,
jumped 229.42 points, as 2.1%, ending at 11,012.24.
What drives the market?
Starting claims for unemployment benefits, perhaps the most followed government data series of the pandemic, showed marked improvement in the last week, and dropped to 963,000. Economists surveyed by MarketWatch, on average, forecast the number of seasonally adjusted initial claims for the week ended August 8 to 1.08 million from 1.19 million the previous week.
That saw futures wipe out small losses to become positive. But questions remain about fiscal incentives for an economy still plagued by the effects of the pandemic.
Top Democrats and White House officials spoke by telephone on Wednesday about another round of using coronavirus, but both sides blamed each other for a lasting deadlock that has been there since negotiations focused on extending a number of expiring measures, including additional unemployment benefits, chairs at the end of last week. President Donald Trump has signed executive orders over the weekend to extend some of these measures in part, but they face legal challenges and doubts about their effectiveness due to logistical constraints.
But with the S&P 500 knocking on the door of an all-time high, investors have largely appeared to be looking above the conflict, analysts said.
“Despite the uncomfortable prospect of a long delay before the United States receives its next major injection of fiscal stimulus, and possibly not before the presidential election in November, there is not much panic in the markets, with most investors betting on one. or some other kind of deal sooner rather than later, ”said Raffi Boyadjian, senior investment analyst at XM, in a note.
Shares are backed by economic data that remains relatively strong despite a persistently high number of new coronavirus cases in the US
“The stock market, in the US and elsewhere, is taking comfort due to the fact that economic data shows resistance to spikes in virus infections. This has been true for a while for the US economy, and we can see it in Asia as well, ”said Kit Juckes, global macro strategist at Société Générale, in a note.
The worldwide number of confirmed cases of COVID-19 rose to 20.6 million on Thursday, with the death toll rising to 749,656, according to data collected by Johns Hopkins University. At least 12.8 million people are confirmed to have recovered. The US has 5.19 million cases, and COVID-19-related deaths stand at 166,027.
And while the number of U.S. cases has remained high, investors appear to be focusing instead on a slowdown in the number of new infections. Last week, there were an average of 53,723 cases per day in the U.S., down 17% from the average two weeks earlier, according to a New York Times tracker.
Which companies are in focus?
- Shares of Lyft Inc.
LIFT,
-0.42%
were expected to be in focus. The company that shares rides would say last Wednesday that riders and revenue fell by more than half during a pandemic-dominated second quarter, but layoffs helped top expectations for loss. I:Uber and Lyft say they could close in California if they were forced to classify drivers as employees - 3M Co.
MMM,
+ 0.53%
shares increased in premarket trading after the maker of personal security, industrial and consumer products last month reported “broad-based improvement” in sales trends. - Shares of network equipment maker Cisco Systems Inc.
CSCO,
+ 1.92%
were down 6% in premarmer trading, after reporting a decline in revenue and soft income for the current quarter Wednesday afternoon, then announced its chief financial officer. - Tapestry Inc.
TPR,
+ 0.45%
shares were higher in premium trading, after the parent company of Kate Spade and Coach briefly reported figures that beat analytical expectations and posted a narrower-than-expected loss. - SmileDirectClub Inc.
SDC,
+ 4.13%
shares were up 5% ahead of the clock after the company reported sales in the second quarter above Wall Street expectations, but GAAP earnings that fell below Wall Street expectations.
How do other markets trade?
Overnight in Asia, China’s CSI 300 Index 000300,
Closed 0.3% lower, while the Hong Kong Hang Seng Index HSI,
moved factional army and the Japanese Nikkei 225 NIK,
hot up 1.8%.
In Europe, the pan-European Stoxx 600 Europe Index is SXXP,
was 0.5% lower and the FTSE 100 UKX,
lower 1.1%.
Proceeds from the 10-year Treasury note TMUBMUSD10Y,
was slightly up to 0.685%. Bond prices move upside down to yields.
Gold GC00,
dropped 0.9% to $ 1,932.00 an hour. Edge oil prices were up 0.3% to $ 42.56 a barrel, a day after hitting a close contract for the month since March 5.
The greenback continued with its slide, with the ICE US Dollar Index DXY,
a meter from the dollar against half a dozen major rivals, 0.4% to 93.08 del.
Next read: Do not assume that this rotation of shares will remain on the market, JP Morgansays
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