The major U.S. index futures are currently pointing towards a higher opening this Thursday, indicating that stocks are likely to see an upswing. This follows a largely stagnant ending to the previous session.
U.S. unemployment benefits have seen a larger than expected rise in the week ended March 30th, according to a report released by the Labor Department. Initial jobless claims have climbed to 221,000, marking an increase of 9,000 from the previous week's revised total of 212,000, surpassing economists' expectations of a rise to 214,000. This is the highest the claims have reached since peaking at 225,000 in the week ending on January 27th.
This uptick in jobless claims could breed optimism about future interest rates. However, traders might hold off on major moves as they await the imminent release of the highly anticipated monthly jobs report this Friday.
Employment in March is projected to make a leap by 200,000 jobs, following February's surge of 275,000 jobs, while the unemployment rate is predicted to stabilize at 3.9 percent.
An additional report brought forth by the Commerce Department revealed that the U.S. trade deficit unexpectedly expanded in February.
Following a downward initial movement, stocks rebounded and spent the majority of Wednesday's trading session in positive territory. Yet, towards the end of the session, there was a discernible tapering off of buying interest. This resulted in a mixed closing with the Dow dropping marginally by 43.10 points or 0.1 percent to 39,127.14, marking its third consecutive lower close. Meanwhile, the S&P 500 slightly increased by 5.68 points or 0.1 percent to 5,211.49, and the Nasdaq advanced 37.00 points or 0.2 percent to 16,277.46.
A report from the Institute for Supply Management showed an unanticipated slowdown in the growth of the U.S. service sector for March, sparking an early turnaround on Wall Street.
Prevailing concerns about the outlook for interest rates, which had contributed to a significant drop in stocks on Tuesday, were allayed somewhat by this data.
Doubts about the Federal Reserve's potential hesitancy to lower interest rates also fueled initial weakness on Wall Street. ADP reported that March saw stronger private sector job growth than expected in the U.S., adding to the uncertainty.
Federal Reserve Chair Jerome Powell highlighted in his remarks at Stanford University that the central bank is in no rush to start lowering interest rates.
Intel's declaration of a $7 billion operating loss by its semiconductor manufacturing business in 2023, bigger than the $5.2 billion operating loss experienced the previous year, saw the company's shares plummet by 8.2 percent.
The day also witnessed a considerable rally in gold stocks, driving the NYSE Arca Gold Bugs Index up by 2.3 percent to its best closing level in over ten months. This surge came as the price of the precious metal reached a new record high.
Computer hardware stocks also showed significant strength, indicated by a 2.1 percent bump in the NYSE Arca Computer Hardware Index. Energy stocks benefited from a rise in crude oil prices, and housing stocks also experienced an upswing.Crude oil futures have dipped slightly, settling at $85.20 a barrel, following a previous rise to $85.43 a barrel. Gold futures, conversely, have seen a minute decrease, falling to $2,305.70 an ounce from a high of $2,315 an ounce.
In the currency market, there are minute differences in the trading values. The U.S. dollar stands at 151.67 yen compared to the previous 151.70 yen. Moreover, its value against the euro is at $1.0862, having risen slightly from yesterday's $1.0836.
In Asia, stocks rose in relatively low-volume trading as China, Taiwan, and Hong Kong are closed for a public holiday. The positive sentiment was carried over following Federal Reserve Chair Jerome Powell's confirmation of a U.S. rate cut that will be implemented, but not in the near future.
Japan saw a rise in shares as the yen weakened, leading to a 0.8 percent climb in the Nikkei 225 Index and a 0.9 percent rise in the Topix Index. Large corporations like SoftBank Group and Itochu also saw increases in share values. Kao Corp, in particular, saw a significant surge of 5.1 percent following advice from the Oasis Management for a possible strategy overhaul.
South Korean stocks likewise witnessed a growth spurt, gaining 1.3 percent and led by SK Hynix, which plans to invest roughly $3.87 billion in a new packaging plant and R&D facility for AI products in the U.S.
Australian markets recorded modest gains as gold reached a record high and copper prices reached an annual high. The S&P ASX 200 Index and the All Ordinaries Index both rose by 0.5 percent, and share prices of Calidus Resources surged amidst reports of a productive quarter for its Warrawoona mine.
In Europe, stock performance was mixed following data showing economic activity in the private sector expanding for the first time in ten months in March. Eurozone services PMI improved to 51.5 from 50.2 the previous month.
The performance of the manufacturing sector in the U.K. was also positive, with the PMI improving to a 20-month high of 50.3. These figures suggest that the U.K. economy might be on the verge of exiting the recession.
Corporate news saw Volvo Car AB report significant growth in vehicle sales in the March quarter. Likewise, Basilea saw an increase after receiving U.S. regulatory approval for Zevtera, an antibiotic medication.
In the U.S., a day before the expected release of the monthly jobs report, the Labor Department stated that first-time claims for U.S. unemployment benefits rose more than expected towards the end of March.
The Labor Department revealed a marginal increase in the four-week moving average to 214,250, an uptick of 2,750 from the revised average of 211,500 from the previous week.
In another development, the Commerce Department reported an unexpected widening of the U.S. trade deficit in February. The trade deficit rose to $68.9 billion that month, up from January's revised figure of $67.6 billion. Economists had predicted a reduction in the deficit to $67.0 billion from the $67.4 billion reported for the previous month. The value of imports and exports increased by 2.2% to $331.9 billion and 2.3% to $263.0 billion, respectively.
Philadelphia Federal Reserve President Patrick Harker was scheduled to participate in a discussion on "Second Chance Employment" as part of the Business Case for Second Chance Employment Conference at 10 a.m. The Treasury Department was set to announce the specifics of this month's three-year and ten-year notes and thirty-year bonds auctions at 11 a.m.
Following this, at 12:15 p.m., Richmond Federal Reserve President Thomas Barkin was slated to give a speech on the economic outlook at the Home Building Association of Richmond. Around lunchtime, Chicago Federal Reserve President Austan Goolsbee was lined up for a moderated Q&A session at the Multi-Chamber Economic Outlook Luncheon and Expo.
At 2 p.m., a virtual conversation on the economic outlook was to feature Cleveland Federal Reserve President Loretta Mester under the aegis of the Global Interdependence Center Executive Briefing. Concurrently, Minneapolis Federal Reserve President Neel Kashkari was also scheduled for a discussion revolving around the U.S. economy, inflation, the pandemic, and the boom of private credit and regulation during a "Linked Live" event.
Evening activities comprised St. Louis Federal Reserve President Alberto Musalem's introductory remarks and Federal Reserve Board Governor Adriana Kugler's speech on "Enriching Data and Analysis in Economics with Real Life Experiences" at the 2024 Women in Economics Symposium.
In the world of stocks, Intuitive Machines (LUNR) pre-market trading shares skyrocketed after receiving a $30 million contract from NASA to execute a Lunar Terrain Vehicle Services Feasibility Assessment. Meanwhile, Levi Strauss (LEVI) experienced significant pre-market gain following a positive fiscal first-quarter report and an upward revision of its full-year guidance. In contrast, shares of Block (SQ) may face a downturn after Morgan Stanley downgraded the financial technology conglomerate's stock from Equal-Weight to Underweight.
