U.S. Stocks May See Further Upside Amid Stimulus Optimism
Stocks may move to the upside in early trading on Thursday, adding to the modest gains posted in the two previous sessions. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 93 points.
Optimism about additional fiscal stimulus may generate early buying interest, as President-elect Joe Biden is expected to unveil a major relief package later today.
A report from CNN citing two people briefed on the deliberations said the price tag for the package is expected to be in the ballpark of $2 trillion.
The package is expected to include an increase in direct payments to Americans as well as an extension of increased unemployment insurance and support for state and local governments.
The futures remained positive following the release of a report from the Labor Department showing initial jobless claims jumped to their highest level in over four months in the week ended January 9th.
The report said initial jobless claims rose to 965,000, an increase of 181,000 from the previous week’s revised level of 784,000.
Economists had expected jobless claims to inch up to 795,000 from the 787,000 originally reported for the previous week.
With the bigger than expected increase, jobless claims reached their highest level since hitting 1.011 million in the week ended August 22nd.
Traders have recently viewed disappointing jobs data as a positive for the markets, as it could put further pressure on lawmakers to approve additional stimulus.
Stocks moved modestly higher during trading on Wednesday, adding to the slim gains posted on Tuesday. While the Dow ended the day nearly unchanged, the broader Nasdaq and S&P 500 moved to the upside.
The Nasdaq climbed 56.52 points or 0.4 percent to 13,128.95 and the S&P 500 rose 8.65 points or 0.2 percent to 3,809.84. Meanwhile, the Dow spent the day lingering near the unchanged line before closing down 8.22 points or less than a tenth of a percent at 13,128.95.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.9 percent, while Australia’s S&P/ASX 200 Index rose by 0.4 percent.
The major European markets have also moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.4 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is up by 0.1 percent.
In commodities trading, crude oil futures are sliding $0.57 to $52.34 a barrel after slipping $0.30 to $52.91 a barrel on Wednesday. Meanwhile, after climbing $10.70 to $1,854.90 an ounce in the previous session, gold futures are slumping $16.70 to $1,838.20 an ounce.
On the currency front, the U.S. dollar is trading at 104.06 yen versus the 103.89 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2119 compared to yesterday’s $1.2157.
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