US index trading will be in focus today, ahead of the jobless claims report scheduled to be released later in the day.
Context: Wall Street closed higher on Wednesday, extending gains from the previous sessions. Indices trading remained high with sentiment being lifted by the US reporting lower-than-expected job losses in the private sector, which raised hopes of a faster economic recovery.
Details: US markets have delivered strong gains in recent sessions, brushing off concerns related to riots and looting in major cities around the country as well as rising tensions between Washington and China.
Investors cheered the strong ADP (Automatic Data Processing) report issued on Wednesday, indicated a decline in private payrolls by 2.76 million in May. While this was higher than the 20.2 million decline recorded in April, it was much lower than the expectation of a 8.66 million decline in jobs.
The ISM’s (Institute for Supply Management) nonmanufacturing index also came in ahead of the 44.7 estimate, rising to 45.4 in May.
The Dow Jones index jumped 527.24 points to settle at 26,269.89 on Wednesday, while the S&P 500 gained 1.4% to reach 3,112.87, representing the strongest close for both indices since March 4. The Nasdaq 100 rose 0.8% to end the day at 9,682.91 and is just 1.4% short of its all-time high recorded in February.
Shares of Zoom Video Communications spiked over 7% after the videoconferencing platform reported better-than-expected quarterly results. Meanwhile, Campbell Soup’s shares tumbled 6% despite upbeat results and management raising the full-year guidance.
In other news, oil prices reached a three-month high on Wednesday, with WTI (West Texas Intermediate) crude for July rising 1.3% to settle at $37.29 a barrel. With a rise in stock index futures, gold futures slipped 1.7% to end the day at $1,704.80 an ounce.
What to watch: Investors await a basket of economic reports from the country, including initial jobless claims, balance of trade, unit labour costs and labour productivity. The number of persons filing for jobless benefits is expected to ease to 1.80 million in the latest week, from 2.123 million in the prior week. The US trade deficit, which widened to $44.4 billion in March, is expected to increase to $49 billion in April.
Unit labour costs are likely to surge 5% in the first quarter, versus a 0.9% gain in the prior period. Labour productivity is expected to fall 2.7% during the first quarter, following a 1.2% rise in the previous period.
Other Markets: In other indices trading, Asian indices traded mostly lower on Thursday, with the China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index down by 0.17% and 0.27%, respectively. Japan’s Nikkei 225 went against the trend to post a rise of 0.35%.