U.S. Stocks May Lack Direction As Monthly Jobs Report Looms

After ending the previous session sharply higher, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a slight uptick at the open, with the Dow futures up by just 22 points.

Traders may be reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

The report is expected to show employment increased by 250,000 jobs in July after jumping by 372,000 jobs in June. The unemployment rate is expected to hold at 3.6 percent.

The strength of the jobs report could impact the outlook for interest rates, although the Federal Reserve will have much more data to digest before their next meeting in September.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended July 30th.

The report showed initial jobless claims crept up to 260,000, an increase of 6,000 from the previous week’s revised level of 254,000.

Economists had expected jobless claims to inch up to 259,000 from the 256,000 originally reported for the previous week.

The Commerce Department released a separate report this morning showing the U.S. trade deficit narrowed by more than expected in the month of June.

The report showed the trade deficit narrowed to $79.6 billion in June from a revised $84.9 billion in May. Economists had expected the trade deficit to shrink to $81.9 billion from the $85.5 billion originally reported for the previous month.

The decrease in the size of the trade deficit came as the value of exports surged by 1.7 percent to $260.8 billion, while the value of imports edged down by 0.3 percent to $340.4 billion.

Stocks moved sharply higher during trading on Wednesday, offsetting the pullback seen over the first two sessions of the week. The rally lifted the tech-heavy Nasdaq to a three-month closing high, while the S&P 500 reached its best closing level in almost two months.

The major averages pulled back off their highs going into the close but held on to strong gains. While the Nasdaq spiked 319.40 points or 2.6 percent to 12,668.16, the S&P 500 surged 63.98 points or 1.6 percent to 4,155.17 and the Dow jumped 416.33 points or 1.3 percent to 32,812.50.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. The German DAX Index is up by 1 percent and the French CAC 40 Index is up by 0.8 percent, while the U.K.’s FTSE 100 Index is up by 0.6 percent after the Bank of England announced its biggest interest rate hike since 1995.

In commodities trading, crude oil futures are inching up $0.19 to $90.85 a barrel after plunging $3.76 to $90.66 a barrel a barrel on Wednesday. Meanwhile, after falling $13.30 to $1,776.40 an ounce in the previous session, gold futures are jumping $22.90 to $1,799.30 an ounce.

On the currency front, the U.S. dollar is trading at 133.86 yen versus the 133.49 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0187 compared to yesterday’s $1.0166.