Futures Draw Back Awaiting Data Reports
U.S. stock index futures declined on Thursday as investors await another staggering jobless claims report. In addition, a plunge in business activity data as state-wide lockdown measures hammer economic growth.
Wall Street jumped in the stock market on a recovery in oil prices. It also jumped on signs Congress was preparing nearly $500 billion more in relief for small businesses and hospitals.
The bill should clear the House of Representatives later in the day.
The benchmark S&P 500 index futures is 17% below its February record high as shutdowns caused layoffs and crushed consumer spending.
Surveys on U.S. manufacturing and services firms will likely reflect dismal readings from Asia and Europe issued earlier on Thursday.
Data is also likely to show a record 26 million Americans sought unemployment benefits over the last five weeks. This confirms that jobs created during the longest employment boom in U.S. history were wiped out in about a month.
Chris Bailey, strategist at Raymond James in London said stock markets are learning. Traders are learning that it is more efficient to react to data rather than trying to predict it.
A lot of people understand that many of the jobless numbers may be temporary. When conditions go back to normal, many people will return to previous jobs.
ET, Dow e-minis were down 52 points, or 0.22% while S&P 500 e-minis were down 0.25 points, or 0.01%. Moreover, Nasdaq 100 e-minis were up 1.75 points, or 0.02%.
Investors Still Expect Volatile Futures
The CBOE volatility index futures has retreated from 12-year peaks hit last month. However, it remains well above levels seen in the past two years.
Stocks analysts have sharply cut their S&P 500 profit expectations for the first and second quarters. This is while companies launched dramatic cost-cutting measures to ride out the economic slump.
Hussein Sayed, chief market strategist at FXTM said, that the global economy is breathing on life support. No one can be sure how equities and other asset classes will perform in the coming months.
What we know is volatility will stay with us for a while. That’s the kind of ‘new normal’ we need to deal with over the forthcoming weeks and possibly months, he added.
Investors are expecting futures to still remain inconsistent.
In stock trading news, Retailer Target Corp reported a surge in digital sales in March and April. It offset a slump in-store sales. But its shares fell 5% in premarket trading as margins continued to be hit by higher costs.
Bigger rival Walmart Inc also fell 1.2% and it was the biggest decliner among Dow components before the bell. Eli Lilly and Co gained 1% as it raised its 2020 profit forecast. It was benefiting from customers stockpiling its medicines such as diabetes drug Trulicity during the pandemic.
