U.S. Stocks May Open Higher As Monthly Jobs Data Looms

Stocks are likely to move to the upside in early trading on Thursday, although trading activity may remain relatively subdued. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 83 points.

Early buying interest may be generated in reaction to a Labor Department report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended August 28th.

The report said initial jobless claims dipped to 340,000, a decrease of 14,000 from the previous week’s revised level of 354,000.

Economists had expected initial jobless claims to edge down to 345,000 from the 353,000 originally reported for the previous week.

With the modest decrease, jobless claims fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

The weekly jobless claims data comes a day ahead of the release of the Labor Department’s more closely watched monthly jobs report.

Traders may stick to the sidelines ahead of the release of the monthly jobs report, which could impact the outlook for monetary policy.

Fed officials have indicated inflation has reached their target but they need to see further improvement in the labor market before they begin tapering asset purchases and raising interest rates.

Economists currently expect employment to jump by 750,000 jobs in August after surging by 943,000 jobs in July. The unemployment rate is expected to dip to 5.2 percent from 5.4 percent.

In other U.S. economic news, the Commerce Department released a report showing the U.S. trade deficit narrowed in the month of July.

The Commerce Department said the trade deficit narrowed to $70.1 billion in July from a revised $73.2 billion in June.

Economists had expected the trade deficit to narrow to $71.0 billion from the $75.7 billion originally reported for the previous month.

The narrower trade deficit came as the value of exports jumped by 1.3 percent to $212.8 billion, while the value of imports dipped by 0.2 percent to $282.9 billion.

Not long after the start of trading, the Commerce Department is scheduled to release its report on factory orders in the month of July. Factory orders are expected to rise by 0.3 percent in July after jumping by 1.5 percent in June.

Stocks saw strength for much of the session on Wednesday before giving back ground in the latter part of the trading day. Despite the late-day pullback, the tech-heavy Nasdaq ended the session at a new record closing high.

The major averages finished the day on opposite sides of the unchanged line. While the Dow edged down 48.20 points or 0.1 percent to 35,312.53, the Nasdaq rose 50.15 points or 0.3 percent to 15,309.38 and the S&P 500 inched up 1.41 points or less than a tenth of a percent to 4,524.09.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.3 percent, while South Korea’s Kospi slumped by 1 percent.

The major European markets are also mixed on the day. While the U.K.’s FTSE 100 Index is slightly below the unchanged line, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.52 to $69.11 a barrel after inching up $0.09 to $68.59 a barrel on Wednesday. Meanwhile, after slipping $2.10 to $1,816 an ounce in the previous session, gold futures are falling $2.90 to $1,813.10 an ounce.

On the currency front, the U.S. dollar is trading at 11.04 yen versus the 110.01 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1842 compared to yesterday’s $1.1839.

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