The stock market was edging higher Thursday as investors looked to economic data on manufacturing and the labor market, while oil prices fell back.
Futures for the Dow Jones Industrial Average indicated an open 60 points higher, after the index fell 211 points Wednesday to close at 35,931. Futures for the S&P 500 and Nasdaq signaled a similar start higher, with the technology stock-heavy Nasdaq on track to outperform.
Overseas, Tokyo’s Nikkei 225 slipped 0.3%, as traders in Japan await a new economic stimulus package set to be released Friday. The pan-European Stoxx 600 rose 0.1%, on pace to rise for 18 of the last 20 sessions.
While investors were spooked Wednesday by signs in the credit market that pointed to fears over corporate profits, stocks were bouncing back Thursday.
At the macro level, global concerns around inflation remain a key focus, with the latest country to report breakneck price increases being the U.K.—where inflation was reported Wednesday as the fastest in a decade and far above all expectations.
“Markets have been limping a bit over the last 24 hours …as the inflation realities seemed to be a bit more in focus,” said Jim Reid, a strategist at Deutsche Bank . “Even as inflation risks mounted however, the major equity indices demonstrated an impressive resilience.”
In the day ahead, investors will look to economic indicators including U.S. initial jobless claims for last week, the Philadelphia Fed manufacturing index for November, and a host of speakers from the Federal Reserve.
Inflationary concerns came amid a divergent performance in commodity markets, where oil prices were tumbling even as European natural-gas prices continued a steady climb and futures for wheat and coffee hit near-decade highs.
“Central banks will be watching these trends closely,” Reid said, noting that it remains unclear who will be President Joe Biden’s pick to lead the Fed for the next four years. Current Fed Chair Jerome Powell is viewed as the favorite, with Fed Governor Lael Brainard—who, like Powell, has been interviewed by the White House—having emerged as another possibility.
“Yesterday’s news was that President Biden will make his pick by Thanksgiving,” Reid noted. “For those keeping track at home, on Tuesday the guidance was within the next four days. So, while it appears momentum toward an announcement is growing, take signaling of any particular day with a grain of salt.”
More specifically on oil, prices were down around 0.5% Thursday, with futures for international benchmark Brent crude trading hands around the psychologically important $80 per barrel mark. U.S. oil futures for West Texas Intermediate slipped below $78, after trading near $82 earlier in the week.
“Oil plumbed a 6-week low despite a larger-than-expected draw on U.S. inventories as the bearish sentiment remains in force amid warnings of oversupply, whilst the White House has requested several nations release barrels from their strategic reserves to lower prices,” said Neil Wilson, an analyst at broker Markets.com.
“Biden has also engaged the Federal Trade Commission to investigate U.S. oil majors over possible illegal behavior that is driving up prices,” Wilson added. He noted that rising Covid-19 cases and concerns over lockdowns in Europe may also be affecting oil demand.
Here are four stocks on the move Thursday
Nvidia (ticker: NVDA) surged 6.5% in the U.S. premarket, after posting strong third-quarter earnings late Wednesday. The stock has also been boosted by sentiment over the company’s push into the metaverse—virtual worlds.
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