Market Snapshot: Dow futures head lower ahead of final flourish of earnings for the week, jobless claims and a fresh dose of Powell

Market Snapshot: Dow futures head lower ahead of final flourish of earnings for the week, jobless claims and a fresh dose of Powell

21 May    Finance News

U.S. stock-index futures indicated modest losses at the start of Thursday trade as investors braced for a fresh round of corporate results and economic reports, including weekly jobless claims. Market participants will hear from Federal Reserve Chairman Jerome Powell for a third time this week since his interview with CBS’s “60 Minutes.”

How are benchmarks faring?

Futures for the Dow Jones Industrial Average YMM20, -0.54% were trading 112 points, or 0.5%, lower at 24,407, those for the S&P 500 index ESM20, -0.52% were trading 15.25 points, or 0.5%, lower at 2,953.25, while Nasdaq-100 futures NQM20, -0.37% were trading 34.25 points lower to reach 9.451.25, a decline of 0.4%.

On Wednesday, the Dow DJIA, +1.52% rallied 369.04 points, or 1.5%, to finish at 24,575.90. The S&P 500 SPX, +1.66% climbed 48.67 points, or 1.7%, to end at 2,971.61, its highest close since March 6, according to Dow Jones Market Data. The Nasdaq Composite COMP, +2.07% rose 190.67 points, or 2.1%, closing at 9,375.78.

What driving the market?

Markets will wade through a morass of economic reports on Thursday, including weekly jobless claims results that have mostly been overlooked by bullish investors in favor of a creeping reopening of the U.S. economy.

A weekly report on Thursday is expected to show that some 2.35 million people sought unemployment benefits in the week ended May 16, likely bringing the total number of Americans out of work during the COVID-19 pandemic to nearly 40 million on a seasonally adjusted basis.

See: The economy is finally recovering from the coronavirus, but the ill-effects aren’t going away for a long time

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That is about one out of every five workers in the labor force.

To be sure, the weekly figure represents a deceleration of the recent unsightly trend of job losses, but may still be a sobering reminder of the toll the viral pandemic has exerted on the U.S. economy over the past few months.

In addition to jobless claims due at 8:30 a.m. Eastern, investors will watch for a survey of businesses conditions in the Philadelphia area, the Philadelphia Fed index, due at the same time. Markit flash PMIs, providing an early read of services and manufacturing activity for May, are due at 9:45 a.m., while a report on existing home sales for April is expected at 10 a.m., along with a composite measure of leading economic indicators, including building permits and factory orders, due at the same hour.

Among Fed speakers, investors will watch for a “Fed Listens” event with Powell and Fed Gov. Lael Brainard at 2 p.m., which will focus on “how the pandemic has changed perspectives on the labor market, inflation and the transmission of monetary policy to households and businesses.”

Before that, New York Fed President John Williams will speak at 10 a.m. and Fed Vice Chair Richard Clarida will speak at 1 p.m.

On Wednesday, the release of an account of the Fed’s April meeting showed that policy makers discussed how to convince the market that the central bank intended to keep federal-funds rates, which currently stand at a range between 0% and 0.25%, at those levels for a long time.

Read: Fed officials discuss how to convince markets that rates will stay low for a long time

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Which stocks are in focus?

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