U.S. equity futures powered higher Thursday, while the dollar eased and Treasury yields fell, as investors appeared to shrug-off accelerating inflation signals, as well as a hawkish Federal Reserve, ahead of a busy slate of bank and bluechip earnings.
Stocks were given an added boost by a big decline in weekly jobless claims, which fell below 300,000 for the first time since the peak of last year’s COVID pandemic.
A record-high reading for factory gate inflation in China September, which followed surprisingly solid export data the previous day, suggests price pressure will ripple through the global supply chain over the coming months.
Alongside yesterday’s faster-than-expected reading for September inflation in the United States, which returned to a 13-year high, and minutes detailing the Fed’s aim of tapering the pace of its $120 billion in monthly bond purchases later this year, and investors now how a much-clearer picture of both the macroeconomic backdrop and the central bank’s likely reaction.
Minutes of the Fed’s September meeting, published yesterday, noted that FOMC members “generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate.”
Still, with a series of big ticket earnings hitting the tape before the start of trading Thursday — including Dow components UnitedHealth Group and Walgreens Boots , as well as Citigroup , Morgan Stanley and Wells Fargo — and a key reading of September retail sales slated for tomorrow, stocks are off to a solid start to the Thursday session.
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The Dow Jones Industrial Average was marked 400 points higher in the opening hour of trading, while the broader S&P 500 jumped 55 points. Nasdaq Composite futures, meanwhile, are set for a 198 point gain as benchmark 10-year note yields eased to 1.528%.
Walgreens Boots Alliance shares were up 3.6% lower in pre-market after it posted stronger-than-expected fourth quarter earnings as pharmacy and retail sales gains boosted the Dow component’s bottom line.
Wells Fargo shares slipped 1.65% in pre-market trading after the troubled lender posted third-quarter earnings that beat analysts forecasts amid broader improvement in the economy and net reserves.
Bank of America jumped 1.25% after it posted stronger-than-expected third quarter earnings Thursday as net interest income and improving loan growth put the lender in a solid position heading into the final months of the year.
UnitedHealth shares were also on the move, rising 5.3% after its adjusted third-quarter earnings beat analysts’ forecasts and the group raised its full-year outlook amid strong membership growth and lower negative Covid-19 after-affects on its operating costs.
Away from equities, global oil prices moved back towards the highest levels in seven years Thursday, adding to inflationary pressures in major economies around the world, as the International Energy Agency warned that power crises in Europe and Asia would boost crude demand through the end of the year.
“Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming,” the Paris-based group said in its monthly energy market report.
WTI futures for November delivery 83 cents higher on the session at $81.26 per barrel after Energy Department stockpile data showed a 1.97 million barrel decline in domestic stockpiles at the Cushing deliver hub. Brent contracts for December, the global pricing benchmark, were up 91 cents at $84.09 per barrel.
This article was originally published by TheStreet.