Stock futures gained overnight trading on Thursday as the S&P 500 aims to have a prosperous week.
Futures on the Dow Jones Industrial Average rose 20 points. S&P 500 futures and Nasdaq 100 futures gained 0.1% each.
The market rally appeared to have slowed somewhat despite strong corporate earnings near the record highs. Macy’s and Kohl’s both blew analyst estimates in their quarterly earnings reports on Thursday.
So far this week the blue chip Dow is down 0.6% for the second consecutive negative week. The S&P 500 and tech-heavy Nasdaq Composite are targeting modest gains of 0.5% and 0.8% respectively this week. The S&P 500 is on track for its sixth positive week in seven and is 0.3% below its all-time high.
More than 90% of the S&P 500 companies have released their third quarter financial results, and over 80% of them reported earnings better than Street’s expectations, according to Refinitiv. S&P 500 companies are well on the way to growing their profits 41.5% year over year.
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“Better-than-expected earnings were all the rage this week,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial. “While investors entered the earnings season with some concern, there are some clear signs that despite price pressures, consumers are resilient and corporate balance sheets are strong.”
On Thursday, investors digested US jobless claims that were more or less in line with expectations. Initial unemployment insurance claims fell slightly to 268,000 in the week ending November 13, the lowest level since March 2020 and the seventh consecutive weekly decline. Economists polled by Dow Jones expected a decline to 260,000.
“With unemployment claims hovering around the lows before the pandemic, the question now arises whether the momentum will continue – both in terms of our economic recovery and the market trend,” said Loewengart.
Investors are also keeping an eye on President Joe Biden’s election as the next Federal Reserve chairman, which is expected to be announced over the weekend. Many expect the Fed to be even more reluctant if Lael Brainard is named head of the central bank, which means it would take longer to hike rates or tighten policies than it did under Jerome Powell.
In Washington this week, the House of Representatives is trying to pass the $ 1.75 trillion Build Back Better economic package. The Senate then plans to include the bill upon his return from a Thanksgiving break.