The Thursday Market Minute
- Global stock rally pauses ahead of weekly jobless claims and a rising U.S. dollar, .
- House Democrats approve procedural changes that will allow for the passage of President Biden's $1.9 trillion stimulus bill without Republican support.
- Treasury Secretary Janet Yellen will chair a hastily-arranged meeting of market regulators to discuss last week's retail-fueled rally on Wall Street that added billions in market value to money-losing companies like AMC Entertainment and GameStop.
- The dollar rises to the highest levels since late November, with bond yields also moving to the upside amid a broader 'reflation trade' powered by an improving U.S. economy.
- Global oil prices hold at 52-week highs as the Energy Department reports another drop in domestic crude stocks and OPEC is advised to maintain its current rate of production cuts.
- U.S. equity futures suggest a firmer open on Wall Street following earnings from Bristol Myers, Merck & Co. and Clorox as well as a modest decline in weekly jobless claims.
U.S. equity futures are looking to extend their February advance Thursday ahead a key reading of weekly jobless claims, with oil prices trading at the highest levels in a year and the dollar posting solid gains against its peers on foreign exchange markets.
Futures held onto their gains after data from the Labor Department showed weekly jobless claims for the January 30 period fell 33,000 to 779,000.
Wall Street is riding a three-day winning streak this month as market volatility gauges slide amid the fading impact of Reddit retail traders and stronger-than-expected earnings from tech giants such as Amazon (AMZN) - Get Report and Alphabet (GOOGL) - Get Report.
Investors are also expecting Congress to pass President Joe Biden's $1.9 trillion stimulus bill, with House Democrats voting on procedural changes yesterday that will allow them to advance the bill in the face of Republican opposition.
The Centers for Disease Control said yesterday that 27.1 million Americans have received at least one dose of a coronavirus vaccine, a figure that tops the top number of reported infections by more than 1 million.
Ongoing signs of improvement in the domestic economy ahead of today's weekly jobless claims, and tomorrow's January employment report, are also boosting sentiment, but a corresponding rise in the U.S. dollar index, which is trading at a late November high of 91.366 against a basket of its global peers, is keeping equity market gains in check heading into the opening bell.
Futures contracts tied to the Dow Jones Industrial Average suggest a modest 45 point bump to the upside, while those linked to the S&P 500 are priced for a 7 point gain. Nasdaq Composite futures are priced to open 55 points higher.
On the flip side, Qualcomm (QCOM) - Get Report shares fell more than 5% as the world's biggest supplier of smartphone chips warned that supply constraints in the semiconductor supply chain would clip near-term sales.
Other stocks of interest this morning were only modestly higher this morning, with GameStop (GME) - Get Report rising 5% in pre-market trading to $97.00 ahead of a hastily-arranged meeting of market regulators at the behest of Treasury Secretary Janet Yellen later today.
In Europe, a busy day for corporate earnings, capped by the first annual profit for Deutsche Bank (DB) - Get Report since 2014, failed to boost regional stocks, even as the euro drifted below the 1.20 mark against the U.S. dollar for the first time since early December.
The Stoxx 600 was marked just 0.07% higher by mid-day trading in Frankfurt, while Britain's FTSE 100 slipped 0.3% after the Bank of England's made no changes to its interest rates or bond buying program in its first policy decision of the year.
Oil prices shrugged-off the stronger dollar to extend their recent gains and breach through the highest levels in a year Thursday after a group of experts advising OPEC leaders urged the cartel to make no changes to its output reductions and the U.S. Energy Department said domestic crude inventories fell by around 1 million barrels last week.
WTI crude futures contracts for March delivery were marked 41 cents higher at $56.10 per barrel in early European trading while Brent contracts for April gained 32 cents to trade at $58.78 per barrel.