U.S. stock-index futures were trading virtually unchanged to lower Thursday morning, ahead of a round of economic reports that include weekly jobless benefit claims due at 8:15 a.m. Eastern.
How are equity benchmarks trading?
On Wednesday, the S&P 500
SPX,
What’s driving the market?
Investors are kicking off July and the start of the third quarter in a tentative fashion. The economy is recovering from the COVID pandemic but there are still questions about the health of the jobs market and inflation that could derail the bullish sentiment supporting all three main stock indexes at or near records after their best first-half performances since 2019.
The question remains how will investors react to economic news in the face of the possibility of a pullback in the Federal Reserve’s easy-money policies.
“While solid data will be good news for the overall economy, it could also revive inflation fears and tapering discussions which could seriously dent market sentiment over the summer season,” wrote Pierre Veyret, technical analyst at ActivTrades, in a research note.
The weekly report on U.S. jobless benefit claims for the week ended June 26 due Thursday is expected to show claims at 395,000, compared with 411,000 in the week ended June 19. The data comes ahead of the Labor Department’s monthly payrolls figures on Friday and a better-than-expected update on private-sector employment from ADP on Wednesday.
Jobless claims are expected to resume falling, if just because emergency federal relief programs are coming to an end by September, forcing some to look for work, but the data has been erratic as seasonal adjustments in the data, which tend to occur at the start of the summer, have been challenging because of the pandemic.
Meanwhile, a final report from IHS Markit on manufacturing activity purchasing managers’ indexes for June is scheduled for 9:45 a.m. ET, followed by a more closely followed reading from the Institute for Supply Management at 10.00 a.m.
A report on construction spending is also due at 10 a.m.
Among Fed speakers, Atlanta Federal Reserve President Raphael Bostic is slated to speak at 2 p.m.
On Wednesday, Dallas Fed President Rob Kaplan again said the Fed should start to slow down, or taper, its asset purchases before the end of the year, in an interview with Bloomberg TV.
Investors may also be watching news abroad, as President Xi Jinping on Thursday celebrated the 100th anniversary of the Chinese Communist Party with a defiant speech warning foreign powers not to “bully” China unless they want “their heads bashed.”
In public health news, the World Health Organization said a 10-week decline in new cases in Europe has come to an end, with cases up 10% last week. WHO regional director for Europe Hans Kluge said the rise is due to relaxed restrictions and increased travel, the Guardian reported, and said a new wave will emerge if discipline isn’t maintained.