Thursday April 8th

8-04-2021

S&P 500 futures rise after the benchmark hits another record close, tech leads early gains

U.S. stock index futures ticked modestly higher in early morning trading on Thursday, suggesting that Wall Street could extend gains that have propelled the benchmark to record levels this week. S&P 500 futures gained 0.3%. Futures for the tech-heavy Nasdaq 100 were the standout, jumping nearly 1%. Futures tied to the Dow Jones Industrial Average were flat. On Wednesday, a late-day pop in the S&P 500 pushed it to 4,079.95, a new closing high. The ‘FAANG’ tech shares of Facebook, Amazon, Apple, Netflix and Google-parent Alphabet were all about 1% higher in premarket trading Thursday. Chip stocks like Nvidia also gained in early trading. Investors processed a worse-than-expected reading on the latest weekly jobless claims. A total of 744,000 Americans filed for unemployment benefits for the first time during the week ended April 3, the Labor Department said Thursday. Economists polled by Dow Jones expect first-time claims to total 694,000. The Federal Reserve’s latest meeting minutes, released Wednesday, showed that officials plan to keep the pace of asset purchases the same for some time as the central bank works to support stable prices and maximum employment. To Evercore ISI equity strategist Dennis DeBusschere, the market is not completely convinced that robust economic growth and inflation will not force the central bank’s hand sooner. “The market is forecasting that the Fed will have to raise rates way before they are saying they will,” he said in an email. “The question is if the Fed raises rates before inflation has moved above 2% for some time.” If they stick to their plan, yield curves will steepen as growth outlook improves and the unemployment rate falls, DeBusschere added. “It is about OUTCOMES.” President Joe Biden spoke on Wednesday from Washington about his administration’s $2 trillion infrastructure plan that includes a corporate tax rate hike to 28% and noted that he is willing to negotiate on the proposed tax increase. The proposed increase to the corporate tax is thought to be a key source of tax revenue for the White House infrastructure plan and is a non-starter for Republicans, who say they are concerned about tax increases as the U.S. economy emerges from the Covid-19 pandemic. Separately, the Treasury Department said that Biden’s tax proposals would generate about $2.5 trillion over 15 years in an effort to pay for eight years of spending on roads, bridges, transit, broadband and other projects. Fiscal support is considered a key driver of the past month’s equity records and strong economic data, including a stronger-than-expected March jobs report. The S&P 500, Dow industrials and Nasdaq Composite are all coming off their fourth straight quarter of gains as the economic recovery from Covid-19 accelerates. Stocks in Asia-Pacific mostly rose on Thursday after the S&P 500 nudged higher to a record closing high overnight. Hong Kong’s Hang Seng index led gains among the region’s major markets, rising 1.16% to close at 29,008.07. Mainland Chinese markets nudged higher on the day. The Shanghai composite rose fractionally to 3,482.55 while the Shenzhen component advanced slightly to 13,989.94. Elsewhere, the Nikkei 225 in Japan slipped less than 0.1% to close at 29,708.98 while the Topix index finished its trading day 0.79% lower at 1,951.86. South Korea’s Kospi closed 0.19% higher at 3,143.26. Oil prices fell on Thursday after official figures showed a big increase in U.S. gasoline stocks, causing concerns about demand for crude weakening in the world’s biggest consumer of the resource at a time when supplies around the world are rising. Brent crude eased 22 cents, or 0.35%, to $62.94 a barrel. U.S. oil fell 43 cents, or 0.7%, to $59.37 a barrel. Gold prices rose on Thursday, as yields on longer-term U.S. Treasuries dropped along with the dollar after the Federal Reserve in its latest policy meeting minutes reinforced expectations that interest rates would remain low for some time. Spot gold gained 0.3% at $1,741.85 per ounce. U.S. gold futures rose 0.1% to $1,742.90 per ounce.