Thursday June 24th


Dow futures jump 150 points, S&P 500 poised to retake record

U.S. stock index futures jumped on Thursday with the S&P 500 poised to surpass its record high set a week ago. Futures on the Dow Jones Industrial Average added 156 points, or 0.5%, on Thursday. The move implied an open about 180 points higher. S&P 500 futures added 0.5% and Nasdaq 100 futures gained 0.6%. A broad group of stocks were jumping in premarket trading and set to push the benchmark above a new all-time high. Tesla added more than 2%, while GM and Caterpillar each gained about 1%. Despite a slight decline Wednesday, the S&P 500 is up 1.8% so far this week and sits just 0.4% from an all time high set last Tuesday, the day before a Federal Reserve policy update caused a dip in the market. Data out Thursday showed jobless claims totaled 411,000 for the week ended June 19, higher than an estimate of 380,000 from economists polled by Dow Jones. Traders are also monitoring infrastructure package negotiations. A bipartisan group of Senators that have made progress on a plan will meet President Joe Biden at the White House Thursday. The lawmakers have worked for weeks to craft a roughly $1 trillion package that could get through Congress with support from both parties. Republicans have fought the president’s proposal to hike the corporate tax rate to 28% from 21% Bank shares gained ahead of the Fed’s annual bank stress test results, which are scheduled for release after the bell on Thursday. The test examines how banks fare during various hypothetical economic downturns. Banks were forced to freeze dividends and stop buybacks during the pandemic. These results should give them the greenlight to eventually raise payouts. Goldman Sachs shares rose about 1% in premarket trading. The S&P 500 snapped a two-day winning streak Wednesday, closing the regular session 0.1% lower. The Dow also shed 71.34 points, or 0.2%. Meanwhile, the Nasdaq Composite gained 0.1% to squeeze out another record closing high. Despite Wednesday’s hiccup, the three major indexes are up more than 1% this week, rallying from a sell-off last week after the Federal Reserve heightened inflation expectations and forecast rate hikes as soon as 2023. Comments from Fed Chair Jerome Powell during a Congressional testimony Tuesday reiterated that inflation pressures should be temporary, which seemed to soothe market sentiment. “Beneath the optimism, markets are at risk of becoming complacent – and vulnerable to shocks. Any signal that interest rates and bond yields could rise, even in the absence of pronounced inflationary pressure, could shatter market exuberance,” Gaurav Mallik, chief portfolio strategist at State Street Global Advisors, said. “Central banks will walk a tightrope between allowing the economy to run hot – which history has shown to be a bad idea – and managing inflation risk,” he added. Shares in Asia-Pacific struggled for direction on Thursday, with major indexes in Japan and mainland China closing flat. Mainland Chinese stocks closed mixed as the Shanghai composite finished the trading day largely flat at around 3,566.29 while the Shenzhen component dipped 0.398% to 14,784.80. Over in Hong Kong, the Hang Seng index advanced about 0.2%, as of its final hour of trading. In Japan, the Nikkei 225 ended the trading day flat at 28,875.23 while the Topix index slipped 0.1% to close at 1,947.10. South Korea’s Kospi gained 0.3% on the day to 3,286.10. Oil prices dipped modestly on Thursday but still held close to their highest in almost three years, supported by drawdowns in U.S. inventories and accelerating German economic activity. Doubts about the future of the 2015 Iran nuclear deal that could end U.S. sanctions on Iranian crude exports also helped prices. Brent dipped 18 cents, or 0.24%, to $75.01 a barrel, after earlier rising to $75.78. U.S. crude slipped 17 cents, or 0.23%, to $72.91 a barrel, after hitting a session high of $73.61 earlier. Both benchmarks had hit their highest since October 2018 on Wednesday before slightly paring back gains. Gold prices languished on Thursday as investors tried to grasp mixed signals from U.S. Federal Reserve officials on interest rate hikes and awaited more economic data to gauge inflationary pressures. Spot gold was down 0.1% at $1,776.20 per ounce, while U.S. gold futures fell 0.3% to $1,777.30. Gold has risen 0.7% so far this week, after last week’s 6% decline.