Dow Futures Steady, Nasdaq Extends Gains As ECB Holds Rates, Jobless Claims Tick Higher

Wall Street looks to extend yesterday's rebound heading into today's opening bell, but weekly jobless claims, as well as a key rate decision from the European Central Bank, are keeping investors cautious.

The Thursday Market Minute

  • Global stocks mixed, with modest gains in Asia and weakness in Europe, ahead of an ECB policy meeting and weekly U.S. jobless claims.
  • ECB kept its three key rates on hold, but could hint at more monetary stimulus in order to address the strength of the euro. 
  • Weekly jobless claims tick higher, to 884,000, while Senate Republican lawmakers attempt to push through a $500 billion coronavirus stimulus bill.
  • Oil prices edge lower ahead of the Energy Department's weekly inventory report, with Brent crude sliding towards $40 a barrel.
  • U.S. equity futures suggest a modestly firmer open on Wall Street following the ECB rate decision and weekly jobless claims data at 8:30 am Eastern time.

U.S. equity futures edged higher Thursday as investors looked to results from a European Central Bank policy meeting that could provide a boost to the dollar and eyed weekly jobless claims data that failed to show a marked improvement in the country's labor market.

The ECB  made no changes to its three key interest rates -- all of which currently sit at record lows -- following its two-day meeting in Frankfurt, with President Christine Lagarde taking question from the media at 8:30 am Eastern time. The ECB also left its quantitative easing program, which purchases government, agency and corporate bonds, at €1.35 billion.

Analysts were not expecting any changes to the Bank's rate policies, but new growth and inflation projections are likely to paint a grim picture for the region's near-term prospects, and a strong euro, which has gained 6% against the greenback since early June, has pushed inflation into negative territory. That likely means Lagarde will hint at fresh monetary stimulus, a move that could weaken the euro -- and strengthen the dollar -- heading into the open of trading on Thursday.

Weekly jobless claims data showed that 884,000 Americans filed for unemployment benefits by September 5, compared to a market estimate of 850,000. The total is well south of the record 6.9 million recorded in March, but remains stubbornly close to the 1 million mark despite improvements in the monthly non-farm payroll report for August. 

With Senate Republicans likely to fail in their bid to advance an procedural vote later today on a $500 billion coronavirus stimulus package, Wall Street looks in little mood to extend risk heading into the start of trading. 

Futures contracts tied to the Dow Jones Industrial Average suggest a modest 80 point gain while those linked to the S&P 500, which is down 2.9% for the month, indicate a 23 point advance. 

Nasdaq Composite futures, meanwhile, suggest a 90 point gain after the tech-focused index lifted itself out of correction territory yesterday with a 2.7% gain, lead by a 7% rebound for Tesla  (TSLA) - Get Report and a 4.3% jump for Microsoft  (MSFT) - Get Report.

European stocks were similarly undecided in early trading in Frankfurt and London, with traders awaiting the ECB rate decision and digesting more news of a potential fallout in Brexit trade talks between Britain and Brussels after Prime Minister Boris Johnson's government said it would change some legislation to override a prior treaty agreement on the Northern Ireland border, a breach of international law.

The Stoxx 600 was marked 0.14% lower in Frankfurt, while the DAX gained 0.2%, with Britain's FTSE 100 marked 0.6% lower in the opening hours of trading. 

The U.S. dollar index was marked 0.175% lower against a basket of six global currencies, including the euro, but that is likely to change when ECB President Lagarde speaks to the media at 7:30 am Eastern time. 

Global oil prices continued to slide, despite the weaker dollar, ahead of the Energy Department's weekly inventory data release at 10:30 am Eastern time.

WTI contracts for October delivery, the U.S. benchmark, traded 61 cents higher from their Wednesday close in New York at $37.44 per barrel in early European dealing while Brent contracts for November, the new global benchmark, were seen 49 cents lower at $40.30 per barrel.

Overnight in Asia, Wall Street's tech-lead rebound boosted the Nikkei 225 in Tokyo, which closed 0.88% higher at 23,235.47 points, while the region-wide MSCI ex-Japan benchmark was seen 0.25% higher heading into the close of trading, although only South Korea and Australia ended the session in positive territory.