Opening Comment — Thursday, May 02, 2024
DJIA: 37,903.29, up 87.37
S&P 500: 5,018.39, down 17.30
NASDAQ: 15,605.48, down 52.34
Stocks higher following Fed rate decision
Stock futures are higher on Thursday, ahead of factory orders and labor market data. Investors look forward to the latest earnings releases. The Dow is rising 0.5% while the S&P 500 is up 0.7%. The Nasdaq 100 is increasing 1.0% relative to fair value on the GLOBEX.
U.S. equities were mixed on Wednesday, as investors digested the Federal Reserve’s (Fed’s) latest policy decision to hold interest rates steady. Fed Chair Jerome Powell suggested that the next rate decision is unlikely to involve a hike. He mentioned that policymakers would require compelling evidence indicating that the current policy stance is not adequately curbing inflation to raise rates. The Dow was up 0.2%, while the tech-heavy Nasdaq Composite fell 0.3%. The S&P 500 decreased 0.3% with six of 11 sectors finishing in negative territory. The Energy sector declined the most, falling 1.6%.
On the data front today, initial jobless claims for the week ending April 27 are expected to be 211,000, higher than the prior week’s 207,000, while continuing claims for the week ending April 20 are projected to register 1.79 million, slightly higher than the prior week’s 1.78 million. March’s factory orders are expected to increase 1.6% versus the previous month’s increase of 1.4%, while the final release of March’s durable goods orders are projected to increase 2.6%, unchanged from the prior reading. The trade balance for March is projected to record a negative $69.7 billion versus the previous month’s negative $68.9 billion. The preliminary reading for the first quarter’s non-farm productivity is expected to increase 0.5% quarter over quarter versus the prior quarter’s 3.3%, while the first quarter’s unit labor costs are expected to increase 4.0% quarter over quarter versus the prior quarter’s 0.4%.
Across the pond, European stocks are mostly higher in mid-day trading with the final March reading for the eurozone’s manufacturing Purchasing Managers’ Index (PMI) unexpectedly increasing from the prior reading. Italy’s Producer Price Index (PPI) showed less deflation in March than the prior month.
Overnight in Asia, stocks were mixed with the initial reading for Hong Kong’s first-quarter Gross Domestic Product (GDP) increasing more than expectations. The final reading for India’s manufacturing PMI for April came in slightly lower than the initial reading. Australia’s trade surplus narrowed in March, compared to an expected widening.
In FOREX trading, the dollar is little changed following the Fed’s latest policy decision to leave rates unchanged.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.7% higher at $79.52/barrel, following the possibility of the U.S. initiating purchases of crude oil for the Strategic Petroleum Reserve.
In the metals complex, gold is 0.2% lower at $2305.70/ounce.