(As of 7:10 am PST)
Futures pointed to a positive
open for US stocks Thursday which are coming off a strong relief rally
yesterday for the Dow, S&P500 and Nasdaq indexes. Yesterday’s rally
strengthened heading into the finish as investors firmed up positions ahead of
the two day holiday for Chinese markets. Today’s open is likely a continuation of
yesterday’s relief rally and a moment of calm with the volatile China trade
closed for the remainder of the week. Adding to the positive direction
were dovish comments from European Central Bank President Mario Draghi this
morning. Draghi and the ECB kept interest rates unchanged and also reaffirmed its
plan to carry out its stimulus program through September 2016 “or beyond”. The
accommodative remarks helped to bid up European bourses, with stocks throughout
Europe on pace to record 2% gains on the day. Economic data is mixed today with
a report on jobless claims showing claims rising last week more than expected,
but still remaining at very low levels. Data on the US trade deficit showed the
deficit fell 7.4% in July on lower imports. Lastly the ISM-services report
showed its services index falling slightly in August, but better than expected,
signaling a sustained growth trend in the sector. Data in general lately has
been positive, with investors and analysts now trying to gauge whether or not
the Fed will move to raise rates later this month. Tomorrow’s closely watched
non-farm payrolls report may be one of the most important indicators we’ve seen
all year – having the potential to swing the Fed to decisive action in September
or to pushing back until later this year. In other markets, gold is lower while
oil is trading flat on the day. Interest rates are also flat on the day.
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