US stock benchmarks traded higher on Thursday morning, and the Dow hit an intraday record, despite a report showing weekly unemployment claims rising to the highest level since last August, when the deal closed. was imposed again in some states to combat the coronavirus pandemic.
Investors, however, are focused on the prospect of more government financial aid, with President-elect Joe Biden set to present details of further fiscal stimulus on Thursday night.
What are the main benchmarks doing?
-
The DJIA of the Dow Jones Industrial Average,
+ 0.38%
rose 144 points, or 0.5%, to 31,203, reaching an intraday record of 31,223.78. -
The S&P 500 SPX index,
+ 0.26%
was trading 12 points, or 0.3%, above 3,822. -
The Nasdaq Composite Index COMP,
+ 0.59%
was up 74 points, or 0.6%, at 13,203.
The Dow DJIA,
fell less than 0.1% on Wednesday, just before a House vote to accuse President Donald Trump for inciting the January 6 Capitol rebellion, while the S&P 500 SPX,
and Nasdaq Composite COMP,
ended up a little higher.
What is driving the market?
CNN reported that Biden, who is expected to speak in Wilmington, Del., Is prepared on Thursday to outline a spending package that would include more direct payments to American families and significant state and local funding.
Another round of large direct payments to families may be the trickiest part of the package, said Hussein Sayed, chief market analyst at FXTM, in a note, because most Republicans and some Democrats in the Senate are against “going too big” .
“On the other hand, opting for a small package will disappoint investors and lead to profits in the stock markets,” he said. “Finding the right balance will not be easy.”
Discussions on additional federal spending come with a report on US weekly unemployment claims in early January were the highest since the end of August, rising from 181,000 to 965,000 when the COVID-19 pandemic caused further blockages across the country. country, the Department of Labor reported on Thursday. Economists, on average, estimated that the claims would reach 800,000.
The US added at least 230,476 new cases on Wednesday, according to a New York Times tracker, and accounted for at least 3,922 deaths, after setting a record of more than 4,400 on Tuesday, the maximum in a single day. since the outbreak began.
The higher numbers of claims for unemployment benefits in early January, however, may help to support the argument among those who argue that the economy needs more fiscal aid as the virus is spreading.
“At a certain point, numbers of difficult jobs, as we saw this morning, may serve as bait for those asking for a correction, but the market’s view seems to be that the light at the end of the tunnel remains in view, despite an implementation of slow vaccination, ”wrote Mike Loewengart, investment strategist at E-Trade Financial, in email comments.
“In addition, a job report that is darker than the exception translates into a greater likelihood of a complete stimulus package, which perversely acts as a wind in favor of the market,” he said.
Optimism for new aid supported optimistic forecasts for market performance in 2021. In fact, Goldman Sachs’ David Kostin projects that the S&P 500 will end 2021 at 4,300.
Meanwhile, investors will also keep an eye on bond yields, which rose last week and earlier this week, in a move attributed to concerns that another fiscal package could fuel inflation. This can mean problems for stocks, as higher yields make higher valuations in the stock market more difficult to justify. Investors may also fear that an acceleration in inflation will cause the Federal Reserve to relax its bond-buying program more quickly than expected.
In other economic news, the US import price index increased by 0.9% in December and 0.4% in December, excluding fuel prices.
Investors will also pay close attention to a speech by Fed Chairman Jerome Powell at 12:30 pm East.
Which companies are in focus?
-
BlackRock Inc.
BLK,
-3.27%
the shares fell 3.7% after the asset manager, with $ 8.7 trillion in assets under management, reported fourth quarter earnings and revenue that exceeded expectations. -
Shars of Tesla Inc.
TSLA,
+ 0.29%
were 1.2% lower. The National Road Traffic Safety Administration has sent a letter to the electric vehicle manufacturer requesting a voluntary recall of 158,000 Model X units from the 2016, 2017 and 2018 model years due to a possible defect affecting safety functions, including camera operation rearview. -
Father of Google Alphabet Inc. shares GOOG,
+ 0.57% GOOGL,
+ 0.52%
may be in focus after the company said it completed the acquisition of fitness monitoring company Fitbit. Alphabet’s classes A and C shares rose 0.4%. -
Cisco Systems’
CSCO,
+ 0.20%
the stock was in focus after CNBC reported it was proposing a bit higher forAcacia Communications
ACIA,
+ 31.87% .
Cisco shares were down 0.3%, while Acacia shares were up 31%. -
Virgin Galactic SPCE shares,
+ 19.92%
jumped more than 20% after ARK Investment Management applied to the Securities and Exchange Commission to launch an exchange-traded space exploration fund.
How are other assets being traded?
-
The yield of the 10-year US Treasury bill TMUBMUSD02Y,
0.161%
rose 1 basis point by around 1.10%. -
The ICE US Dollar Index DXY,
+ 0.03% ,
a currency meter against a basket of six major rivals, rose 0.2%. -
Oil futures traded lower, with the American benchmark CL.1,
-0.59%
0.3% lower, at $ 52.77 per barrel. GC00 future gold,
-0.49%
0.6% down at $ 1,843.70 an ounce. -
The Stoxx 600 SXXP pan-European index,
+ 0.68%
was rising 0.4% higher, while London’s FTSE 100 UKX,
+ 0.65%
rose 0.5%. -
In Asia, Shanghai Composite SHCOMP,
-0.91%
closed 0.9% below, while the Hong Kong Hang Seng HSI Index,
+ 0.93%
rose 0.9% and Japan’s Nikkei 225 index, NIK,
+ 0.85%
gained 0.9%