Futures Pointing To Continued Strength On Wall Street

Futures Pointing To Continued Strength On Wall Street

The major U.S. index futures are pointing to a higher opening on Thursday, with stocks poised to extend the upward move seen over the two previous sessions. The upward momentum on Wall Street comes as traders are digesting the latest batch of U.S. economic data.

Stocks moved mostly higher over the course of the trading session on Wednesday, adding to the gains posted on Tuesday. Trading activity was somewhat subdued, however, as traders seemed reluctant to make significant moves.

While the Nasdaq jumped 66.42 points or 1.1 percent to 6,368.31, the S&P 500 climbed 11.29 points or 0.5 percent to 2,457.59 and the Dow inched up 27.06 points or 0.1 percent to 21,892.43.

The strength on Wall Street came following the release of some upbeat U.S. economic data, including a report showing a jump in private sector employment.

Private sector employment in the U.S. increased by more than anticipated in the month of August, according to a report released by payroll processor ADP.

ADP said private sector employment jumped by 237,000 jobs in August following an upwardly revised increase of 201,000 jobs in July.

Economists had expected employment to climb by 185,000 jobs compared to the addition of 178,000 jobs originally reported for the previous month.

A separate report released by the Commerce Department showed U.S. economic activity increased by more than previously estimated in the second quarter.

The Commerce Department said gross domestic product jumped by 3.0 percent in the second quarter compared to the previously estimated 2.6 percent growth.

Economists had expected a much more modest upward revision in the pace of GDP growth in the quarter to 2.7 percent.

Semiconductor, biotechnology and housing stocks showed significant moves to the upside on the day, while notable weakness was visible among oil service and gold stocks.

Commodity, Currency Markets

Crude oil futures are inching up $0.13 to $46.09 a barrel after falling $0.48 to $45.96 a barrel on Wednesday. An ounce of gold is trading at $1,313.80, down $0.30 compared to the previous session’s close of $1,314.10. On Wednesday, gold slid $4.80.

On the currency front, the U.S. dollar is trading at 110.51 yen compared to the 110.24 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1847 compared to yesterday’s $1.1884.

Asia

Asian stocks reversed early gains to end mixed on Thursday as renewed tensions between Washington and North Korea as well as weak commodity prices on the back of a firmer dollar overshadowed upbeat data from the U.S. and China.

Geopolitical tensions returned to the fore after U.S. President Donald Trump declared “talking is not the answer” to the tense standoff with North Korea.

Chinese stocks ended slightly lower as investors paused for breath after a recent rally on the back of robust earnings from major Chinese companies.

The benchmark Shanghai Composite Index eased 2.63 points or 0.1 percent to 3,361.00, while Hong Kong’s Hang Seng Index fell 124.31 points or 0.4 percent to 27,970.30.

Activity in China’s manufacturing sector continued to expand in August, and at a faster rate, the latest survey from the National Bureau of Statistics showed today with a PMI score of 51.7. That beat forecasts for 51.3 and was up from 51.4 in July.

However, the official non-manufacturing PMI came in with a score of 53.4, down from 54.5 in the previous month.

Moody’s Investors Service raised China’s growth forecast, citing a stronger expansion in the first half of the year. The rating agency raised China’s growth outlook for 2017 to 6.8 percent from 6.6 percent.

Japanese shares hit two-week highs as the yen weakened and U.S. Treasury yields rose in response to upbeat U.S. economic data, helping spur gains by exporters and financials.

The Nikkei 225 Index rose as high as 19,687.99 before finishing 0.7 percent higher at 19,646.24. The broader Topix Index closed 0.6 percent higher at 1,617.41.

Daiichi Sankyo shares jumped 5.3 percent before trading was suspended following reports that Britain’s AstraZeneca offered to buy the Japanese drug maker last year. Fujifilm Holdings rose 2.3 percent after announcing a share buyback.

Investors shrugged off weaker-than-expected Japanese industrial output data showing that production dropped into contraction in July.

Australian shares rose sharply, led by gains by banks and mining stocks, which came under heavy selling pressure earlier this week.

The benchmark S&P/ASX 200 Index climbed 44.80 points or 0.8 percent to 5,714.50, while the broader All Ordinaries Index ended 42.50 points or 0.7 percent higher at 5,776.30.

The big four banks rose between 0.4 percent and 1.2 percent, and mining heavyweights BHP Billiton and Rio Tinto gained 1.6 percent and 1.7 percent, respectively.

Meanwhile, Beach Energy, Oil Search and Woodside Petroleum lost around 2 percent each after crude futures dropped 1 percent overnight to touch their lowest level since July on concerns about the fallout from Hurricane Harvey.

Specialty retailer Harvey Norman slumped 7.5 percent on reducing its final dividend. Online travel booking business Webjet jumped 5.5 percent after its annual profit more than doubled.

Europe

European stocks have moved higher on Thursday as investors cheered upbeat data from the U.S. and China and kept a close eye on the final day of Brexit talks taking place in Brussels.

The dollar held steady while safe-haven assets such as the yen and gold eased, underscoring improving investor sentiment.

While the German DAX Index has climbed by 0.6 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 0.7 percent.

Banks are broadly higher, with Commerzbank, Deutsche Bank, BNP Paribas and Credit Agricole rising 1-2 percent after U.S. Treasury yields rose in response to upbeat U.S. GDP and ADP employment data.

France’s Bouygues has rallied after it swung to profit in the first-half and confirmed its 2017 outlook.

UBS has moved marginally higher amid reports that the Swiss bank is considering relocating 250 investment bankers from London to Frankfurt or another major city in the European Union.

Meanwhile, Carrefour shares have fallen sharply after the French retailer issued a profit warning for the second half of the year.

Pernod Ricard shares has also tumbled after the world’s second largest wines & spirits company warned that a strong euro may weigh on its earnings from North America and Asia.

In economic news, German retail sales increased at a slightly faster pace in July, while the jobless rate fell slightly, figures from Destatis showed.

French consumer price inflation rose to a four-month high of 0.9 percent in August, in line with expectations, and up from 0.7 percent in July.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits edged slightly higher in the week ended August 26th, according to a report released by the Labor Department.

The report said initial jobless claims inched up to 236,000, an increase of 1,000 from the previous week’s revised level of 235,000.

Economists had expected jobless claims to rise to 237,000 from the 234,000 originally reported for the previous week.

A separate report released by the Commerce Department showed U.S. personal income rose by slightly more than expected in the month of July, while personal spending increased by slightly less than expected.

The Commerce Department said personal income climbed by 0.4 percent in July after coming in unchanged in June. Economists had expected income to rise by 0.3 percent.

Meanwhile, the report said personal spending rose by 0.3 percent in July after edging up by 0.2 percent in the previous month. Spending had been expected to increase by 0.4 percent.

At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of August.

The Chicago business barometer is expected to edge down to 58.5 in August from 58.9 in July, although a reading above 50 would still indicate growth.

The National Association of Realtors is also due to release its report on pending home sales in the month of July at 10 am ET. Pending home sales are expected to climb by 0.5 percent.

by RTT Staff Writer

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