The Thursday Market Minute
- Global stocks trade at fresh record highs following Wall Street's best Inauguration Day gains in nearly 40 years with a focus now on President Biden's first days in office.
- Biden's ambition to immunize 100 million people in 100 days gives an early boost to stocks Thursday, with bets on Congressional approval of a $1.9 trillion stimulus bill also supporting markets both at home and abroad.
- The U.S. dollar extends declines against its global peers as sentiment improves, but 10-year bond yields dip under 1.09% despite concerns for near-term borrowing increases.
- European stocks climb on stronger-than-expected earnings ahead of the first ECB policy decision of the year at 7:45 am Eastern time.
- Oil prices slide after the API posts a surprise decline in domestic crude stocks, with Energy Department data due at 10:30 am Eastern time.
- U.S. equity futures suggest a higher open on Wall Street after quarterly earnings from Travelers and Union Pacific and modestly better weekly jobless claims.
Wall Street futures edged higher into record territory Thursday, pulling stocks around the world to fresh all-time highs, as investors continue to bet on near-term economic support from the United States alongside an overhaul of the country's coronavirus prevention strategy.
Stocks pared early gains, as well, following a modest dip in weekly jobless claims, which fell 26,000 to 900,000 over the week of January 16, and housing starts, which surged 5.8% over the month of December.
President Joe Biden is expected to unveil a series of changes Thursday that will both simplify and improve the country's approach to tackling the spread of the virus, which added more than 180,000 cases yesterday while taking the lives of more than 400,000 people over the past year.
The new administration's aim of immunizing 100 million people in President Biden's first 100 days in office will hinge, at least in part, on Congressional approval of the $1.9 trillion stimulus bill laid out earlier this week.
The package's impact, as well as the prospects of changes to infrastructure spending ambitions and a more multi-lateral approach to trade and foreign policy, helped lift U.S. stocks to fresh record highs yesterday in the best Inauguration Day performance in nearly 40 years.
Wall Street looks set to extend some of those gains Thursday in what is expected to be a muted session bookended by weekly jobless claims at 8:30 am Eastern time and fourth quarter earnings from Intel Inc. (INTC) - Get Report and IBM (IBM) - Get Report after the close of trading.
Futures contracts tied to the Dow Jones Industrial Average suggest a modest 10 point opening bell gain, while those linked to the S&P 00 are price for an 1.5 point bump. Nasdaq Composite futures look set to add another 30 points to last night's closing high of 13,457.25 points.
European stocks were also on the rise Thursday following the first European Central Bank policy decision of the year later this morning in Frankfurt, with a modestly firmer euro and reports of extended lockdowns and border closures in the face of rising COVID infections keeping a cap on gains.
Elsewhere, the U.S. dollar index fell 0.5% against a basket of its global peers to trade at 90.049 as broader risk sentiment improved and traders continued to factor-in the costs of trillions in new spending from the Biden administration on the greenback.
Curiously, benchmark bond yields moved in the same direction, with 10-year notes falling to 1.084% despite the anticipated increase in borrowing, with buyers perhaps attracted to the -- albeit modest -- returns in a global government bond market choked by $18 trillion worth of negative-yielding debt.
The weaker dollar failed to help oil prices, however, which fell for the first day in three after the American Petroleum Institute published data late Wednesday showing a surprise 2.6 million barrel increase in domestic crude supplies.
WTI contracts for March delivery, the U.S. benchmark, fell 51 cents in early European trading to $52.80 per barrel while Brent crude contracts for the same month slipped 47 cents to $55.61 per barrel.
Overnight in Asia, Japan's Nikkei 225 rebounded to a 0.83% gain that lifted the benchmark to a near three decade high of 28,759.86 points, while solid gains for stocks in China and South Korea lifted the region-wide MSCI ex-Japan index to a 0.8% advance heading into the final hours of trading.