US stocks will be in focus today, ahead of a basket of economic data from the country.
Context: US equity indices surged on Wednesday, settling in record territory with investor sentiment being lifted by progress in the development of covid-19 vaccines.
Details: Markets shrugged off mixed economic reports released yesterday, which included downbeat ADP (Automatic Data Processing) figures for private sector jobs.
The ADP reported the addition of 428,000 jobs in private sector during August, significantly missing the consensus estimates of 900,000 job creations.
Some economic reports were positive, lending support to market sentiment. US factory orders rose for the third straight month, by 6.4% in July, while the Federal Reserve’s Beige Book showed the country’s economy had expanded in August.
Investors continued to invest in blue-chip technology stocks and shares of companies supporting remote working trends.
Vera Bradley’s shares spiked around 32% after the retailer delivered a surprise profit for the latest quarter. Shares of Guess Inc jumped around 12% after the company reported better-than-expected quarterly earnings. Macy’s stock gained as well, after the department store chain posted a narrower-than-expected quarterly loss.
The Dow Jones index jumped 454.84 points to close at 29,100.50 on Wednesday, just short of its closing record of 29,551.42 reached on February 12.
The S&P 500 and Nasdaq 100 continued to crush their previous records. The S&P 500 gained 1.5% to reach 3,580.84, notching its 22nd record settlement for the year. The Nasdaq 100 added 116.78 points to settle at 12,056.44, marking its 43rd record close this year.
What to watch: Investors await reports on balance of trade, unit labour costs, labour productivity, initial jobless claims, services PMI, composite PMI, and ISM non-manufacturing PMI from the US.
The US trade deficit is expected to widen to $58 billion in July, from $50.7 billion in June. Unit labour costs are expected to increase 12.1% in the second quarter, while labour productivity is estimated to rise 7.5%.
Initial jobless claims are expected to decline to 950,000 in the latest week, from 1.006 million in the week ending August 22. Economists expect the IHS Markit services PMI to improve to 54.8 in August, from July’s reading of 50.0. Composite PMI is estimated at 54.7 in August, while the ISM non-manufacturing PMI is expected to slip to 57.
Markets will continue to access the covid-19 numbers, with total cases exceeding 6.1 million in the US.
Other Markets: European indices were trading higher at 8:30am GMT, with the FTSE 100, French 40 and Dax 30 index up by 0.7%, 1.3% and 1%, respectively.