Thursday, May 5, 2016

Economic Journal - Thursday, 5/5/2016

(As of 7:20 am PST)

US stocks opened with gains Thursday recovering some of yesterday’s losses while looking to record their first positive session in three days. Surging oil prices helped to lift stocks early and offset otherwise disappointing economic data. Oil rallied nearly 4% to $45.40 per barrel as wildfires in Canada’s oil sands region disrupted output in the area. Economic data is light but weak today. Jobless claims rose to 274,000 from 257,000 last week, rising to their highest level in 5 weeks. The data comes just a day after a weak reading on private sector payrolls and lower worker productivity. As we get set for tomorrow’s non-farm payrolls report there’s a feeling we may see a “bad news-good news” trade creep back in to the narrative of May’s trading month. Weak labor data may further delay the Federal Reserve’s interest rate hikes this year, putting the Fed in a tight spot for its June meeting. Perhaps we’re seeing a bid up in stocks today on that speculation. In any event, tomorrow’s payrolls report will be highly scrutinized. Across the globe, equity performance was mixed. Asian markets were mostly lower while European markets were marginally higher. Precious metals are on the rise as is the US dollar which is showing strength in recent days.

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