After a considerable dip in the previous session, stocks appear poised for a climb in early trading Thursday, with leading indicators like the S&P 500 futures showing a 0.3% increase. initially, market futures suggested a flat open, however, following the release of various U.S. economic data, the markets seemed to gain momentum.
The Commerce Department reported stronger-than-anticipated U.S. economic growth for the fourth quarter, despite a surprise stagnation in durable goods orders for December, and a significant bounce back in weekly jobless claims. Traders might set aside the Q4 GDP data as outdated and focus instead on the recent economic data that paints a more optimistic picture about potential future interest rate cuts.
According to a report released by the Commerce Department this morning, the U.S. economy saw substantial growth in Q4 of 2023, exceeding expectations. The gross domestic product spiked by 3.3% in the fourth quarter, following a 4.9% surge in the third. Economists previously predicted a GDP increase of just 2.0%.
In contrast, a separate Commerce Department report showed the new orders for U.S. manufactured durable goods remained steady in December, contradicting projections of a 1.1% increase. Orders for durable goods barely changed after a substantial increase of 5.5% the previous month. However, when excluding transportation equipment orders, durable goods orders increased by 0.6% in December, after a 0.5% rise in November.
The Labor Department reported that first-time applications for U.S. unemployment benefits rose more than expected in the week ending January 20th. The total claims increased to 214,000—an increase of 25,000 from the revised figure of 189,000 from the preceding week. This rise surpassed economists' expectations, which were set at 200,000.
At the beginning of trading, the Commerce Department plans to release its December report on new home sales. Predictions suggest an increase to an annual rate of 645,000 new home sales for December, up from November's depressed rate of 590,000.
Stocks made significant early gains on Wednesday before retracting some of that ground later in the session. Major averages showed significant drops from their session highs by the afternoon, with the Dow shifting into the red. The session eventually ended with a mix of results: the Nasdaq rose 0.4% to 15,481.92 and the S&P 500 increased 0.1% to 4,868.55, while the Dow slipped 0.3% to 37,806.39.
Despite this afternoon dip, the S&P 500 managed to achieve a new record closing high, and the Nasdaq posted its best closing level in over two years. In international trading, stocks in Asia-Pacific markets generally increased during Thursday trading. Japan's Nikkei 225 Index closed just above the unchanged line, while Hong Kong's Hang Seng Index jumped 2.0% and China's Shanghai Composite Index surged 3.0%.
Conversely, major European markets showed a slight weakness after the ECB decided to keep interest rates fixed. Both the French CAC 40 Index and the German DAX Index fell by 0.3%, while the U.K.'s FTSE 100 Index decreased by 0.1%. Crude oil futures are also showing gains, jumping $0.97 to $76.06 a barrel after an increase of $0.72 to $75.09 a barrel on Wednesday.
Gold futures, after dropping $9.80 to $2,016 an ounce the previous day, are slightly increasing by $2.60 to $2,018.60 an ounce today. On the currency front, the U.S. dollar is trading at 147.42 yen, slightly lower than the 147.51 yen it ranged at the close of New York trading on Wednesday. Compared to the euro, the dollar is valued at $1.0893, a slight rise from yesterday's $1.0885.
