Stocks rallied on Thursday ahead of the US employment report. Apparently, investors are balancing corporate results and jobless claims against the threat of the COVID-19 delta variant.
The S&P 500 hit record highs and closed 0.48% higher yesterday, while dollar showed a decline amid a decrease in initial jobless claims.
Carter Henderson, portfolio manager at Fort Pitt, said the scenario is favorable to equities, and is likely to remain so as long as the Fed remains flexible and corporate earnings continue to rise.
Data on the US labor market will also remain as a key window to the economic outlook. Recently, ADP reported that non-farm employment is much softer than expected, while growth for US service industries is advancing sharply.
"While jobless claims have been a little volatile in the past few months, we are starting to see a gradual decrease, which suggests that more people are hiring, and the historic lows in trade deficits are a testament to the demand we see from consumers. So while there may be a shortage of supply in the labor market and goods, it is encouraging to see strong demand, even as concerns about the delta strain gravitate towards investors, " E * Trade Financial Managing Director Mike Loewengart explained.
Other important events for today are:
- policy decision of the Reserve Bank of India;
- US employment for July;
- data on employment and business activity in Canada.
