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Wall Street opens in the green despite jobless claims disappointment

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The main stock market indices in New York opened positively on Thursday morning as trader optimism over more US stimulus appeared to override a disappointing set of jobless claims data.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.44% at 28,428, while the S&P 500 climbed 0.51% to 3,437 and the Nasdaq rose 0.65% to 11,438.

The headway in stocks was contrasted by a bleaker macro picture as US jobless claims data showed 840,000 Americans filed for unemployment benefits in the week to October 3, a slight decrease from the adjusted figure of 847,000 for the previous week but above some analyst forecasts of around 837,000.

The figure shows the recovery of the US economy is perhaps more sluggish than some are forecasting, although the fact the number is still declining may be seen as a silver lining.

7.45am: Wall Street to start higher as stimulus hopes persist

US markets are expected to open higher, driven by hopes that the long-awaited fiscal stimulus package will (eventually) be delivered.

The Dow Jones Industrial Average is expected to advance 120 points to 28,423. The broader-based S&P 500 is tipped to harden 11 points to 3,430 while the tech-heavy NASDAQ Composite is seen rising 192 points to 11,547.

“Two things continue to drive this market higher – hopes of stimulus and a solid Biden poll lead that seems to point towards a decisive result in the elections that will, all things being equal, greatly reduce the chances of a legal challenge following the November poll,” said Chris Beauchamp, the chief market analyst at IG.

Craig Erlam, an analyst at another online trading platform operator, OANDA, reckons “it may also help that the Democrats lead has widened in the polls which may give them some confidence that a more ambitious, comprehensive package can more easily be passed in January”.

“Trump has clearly ramped it up this week and the polls suggest voters aren’t yet warming to what he has to say. That, of course, may change but Democrats may be feeling more confident. The vice-Presidential debate won’t change the views of the electorate, which the Democrats may be happier with given their lead. It was far more civil than the exchange between the Presidential candidates, although they did shirk the tougher questions,” Erlam suggested.

Traders will be waiting for the latest first-time jobless claims, due later today.

Pantheon Macroeconomics is forecasting a fall to around 825,000 last week from 837,000 claims the week before; the consensus forecast is 820,000.

“The jobless claims numbers today are a bit of a wild card. We model the unadjusted week to week change in initial claims using Google searches for “file for unemployment” and the hard daily data released by Wisconsin’s Department of Workforce Development; as far as we know, Wisconsin is now the only state to publish numbers in advance of the weekly report from the federal Department of Labor. This approach has worked reasonably well, but we’re concerned now that Wisconsin’s number might not be reliable, because the state now has the third-highest number of daily new Covid-19 cases in the country, per capita, and economic activity is suffering,” Pantheon explained.

Five things to watch for on Thursday:

  • Jobless claims data for the week ended October 3 is expected to show 820,000 Americans filed for unemployment during the period, a decrease from 837,000 in the previous week but still an elevated figure, indicating that the labor market is still sluggish in its recovery
  • There may also be some insight on the economy from speeches expected from Boston Fed president Eric Rosengren, Atlanta Fed president Raphael Bostic, and Chicago Fed boss Charles Evans
  • Following tweets from Donald Trump overnight on Tuesday about piecemeal stimulus measures for the US economy, any political developments in Washington DC are likely to be in focus after last night’s vice-presidential debate between Mike Pence and Kamala Harris failed to provoke any fireworks
  • Shares in computing giant International Business Machines Corp (NYSE:IBM) will be eyed following news the conglomerate will spin out its managed infrastructure services unit into a new public company
  • Also in focus will be Regeneron Pharmaceuticals Inc (NASDAQ:REGN) after an experimental antibody cocktail developed by the company was used by Trump following his COVID-19 diagnosis

Story by ProactiveInvestors



Source: https://www.proactiveinvestors.com/companies/news/931006/wall-street-opens-in-the-green-despite-jobless-claims-disappointment-931006.html


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