Upward Momentum May Lead To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a modestly higher open on Thursday, with stocks likely to move to the upside after ending the previous session little changed.

The markets may continue to benefit from recent upward momentum, which has seen the Nasdaq and the S&P 500 extend their winning streaks to nine and eight sessions, respectively.

The S&P 500 also ended Wednesday’s session at its best closing level in well over a month despite the choppy trading on the day.

The markets may continue to benefit from optimism about the outlook for interest rates ahead of remarks by Federal Reserve Chair Jerome Powell.

With Powell refraining from addressing monetary policy during a speech on Wednesday, his remarks during a policy panel discussion at the 24th Jacques Polak Annual Research Conference may attract increased attention.

Powell’s remarks come relatively late in the trading day, however, potentially leading to light activity for much of the session.

The Dow may receive a boost from Disney (DIS), with the entertainment giant surging by 4.1 percent in pre-market trading after reporting better than expected fiscal fourth quarter earnings.

Stocks showed a lack of direction over the course of the trading day on Wednesday, with the major averages bouncing back and forth across the unchanged line after trending higher over the past several sessions.

The major averages eventually ended the session narrowly mixed. While the Dow edged down 40.33 points or 0.1 percent to 34,112.27, the Nasdaq crept up 10.56 points or 0.1 percent to 13,650.41 and the S&P 500 inched up 4.40 points or 0.1 percent to 4,382.78.

Despite the choppy trading, the Nasdaq and the S&P 500 extended their winning streaks to nine and eight sessions, respectively, with the latter once again reaching its best closing level in well over a month.

The lackluster performance on Wall Street came as traders seemed reluctant to make significant moves following the recent strength in the markets.

Stocks did not succumb to profit taking, however, as optimism the Federal Reserve is done raising interest rates continued to support the markets.

Amid the focus on the outlook for interest rates, traders kept a close eye on remarks by Fed Chair Jerome Powell this morning.

However, Powell refrained from specifically addressing monetary policy, focusing his remarks on praise for the work done by the Fed’s Division of Research and Statistics.

Traders also largely shrugged off the results of the Treasury Department’s auction of $40 billion worth of ten-year notes, which attracted average demand.

Most of the sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Gold stocks showed a substantial move to the downside, however, with the NYSE Arca Gold Bugs Index plunging by 2.8 percent.

The sell-off by gold stocks came amid a decrease by the price of the precious metal, as gold for December delivery fell $15.70 to $1,957.80 an ounce.

Considerable weakness was also visible among biotechnology stocks, resulting in a 1.5 percent drop by the NYSE Arca Biotechnology Index.

Oil producer, natural gas and brokerage stocks also saw notable weakness, while pharmaceutical and software stocks saw some strength on the day.

Commodity, Currency Markets

Crude oil futures are jumping $1 to $76.33 a barrel after tumbling $2.04 to $75.33 a barrel on Wednesday. Meanwhile, after falling $15.70 to $1,957.80 an ounce in the previous session, gold futures are sliding $7.50 to $1,950.30 an ounce.

On the currency front, the U.S. dollar is trading at 151.04 yen versus the 150.98 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0699 compared to yesterday’s $1.0709.

Asia

Asian stocks ended Thursday’s session mostly higher despite uncertainty surrounding the Federal Reserve’s interest rate path and signs of intensifying downward pressures on prices in China.

The dollar index held steady in Asian trading after three sessions of gains. Bond yields inched lower despite Fed officials sounding hawkish tones.

Gold was little changed, while oil ticked up after dropping to three-month lows on Wednesday on concerns over waning demand in the U.S. and China.

China’s Shanghai Composite Index fluctuated before finishing marginally higher at 3,053.28. Hong Kong’s Hang Seng Index slipped 0.3 percent to 17,511.29.

Official data showed Chinese consumer prices fell 0.2 percent year-on-year in October, while factory-gate prices declined 2.6 percent, falling for a 13th month in a row and raising concerns over domestic demand.

Japanese shares rallied after reports that Prime Minister Fumio Kishida had decided against calling an election before the end of the year.

The Nikkei 225 Index jumped 1.5 percent to 32,646.46, snapping a two-day losing streak. The broader Topix Index settled 1.3 percent higher at 2,335.12.

Energy stocks outperformed, with Cosmo Energy Holdings surging almost 9 percent after raising its profit forecast.

Watch and calculator maker Casio soared 7 percent after announcing better-than-expected financial results. Nintendo added 5.6 percent after confirming it’s making a live-action Legend of Zelda movie.

Seoul stocks eked out modest gains, with the Kospi closing up 0.2 percent at 2,427.08. Battery makers suffered losses, with Samsung SDI losing 2.3 percent and LG Energy Solution falling 1.9 percent.

Australian markets finished at a three-week high, led by banks and miners. The benchmark S&P ASX 200 Index rose 0.3 percent to 7,014.90, while the broader All Ordinaries Index ended 0.2 percent higher at 7,215.10.

Lender NAB fell 0.8 percent, reversing early gains after annual cash profit came in below expectations.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index rose 0.4 percent to 11,197.66.

Fonterra Co-Operative Group shares advanced 1.9 percent after the dairy exporter said the medium-term outlook for its New Zealand dairy market remained positive.

Europe

European stocks have moved mostly higher during trading on Thursday despite hawkish comments from Fed and ECB officials.

Fed Vice Chair Philip Jefferson on Wednesday said that high uncertainty could warrant an aggressive, rather than a gradual, policy response.

Fed Chair Jerome Powell didn’t comment on monetary policy or the economic outlook in prepared remarks at a conference on Wednesday. He will appear again on a panel discussing monetary policy challenges later today.

European Central Bank Vice President Luis de Guindos told Slovenia’s Finance newspaper in an interview published today that any talk of lowering borrowing costs in the coming months is clearly premature.

While the French CAC 40 Index has advanced by 0.8 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both up by 0.6 percent.

Drug maker AstraZeneca has jumped in London after reporting better-than-expected third quarter results and raising its profit outlook.

France’s Schneider Electric has also moved sharply higher after announcing its long-term outlook. German consumer goods company Henkel has also rallied after raising its guidance for the year.

Deutsche Telekom has also risen. The telecommunications operator announced its third revision to its earnings outlook for 2023 following a strong third quarter performance.

Life sciences and chemical group Merck KGaA has also surged after reporting better-than-expected profit.

On the other hand, steelmaker ArcelorMittal has moved to the downside after reporting lower third quarter profit and sales.

Flutter Entertainment has also plunged. The online betting firm said it has finalized its plans to list in the U.S. and delist from Euronext Dublin, the Irish Stock Exchange.

Wizz Air Holdings has also moved sharply lower after the budget carrier narrowed its annual profit forecast.

Plane maker Airbus has also fallen a day after posting higher underlying third-quarter profit and reaffirming financial and delivery targets for 2023.

U.S. Economic Reports

First-time claims for U.S. unemployment claims edged down from an upwardly revised level in the week ended November 4th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims slipped to 217,000, a decrease of 3,000 from the previous week’s revised level of 220,000.

Economists had expected jobless claims to inch up to 218,000 from the 217,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 212,250, an increase of 1,500 from the previous week’s revised average of 210,750.

At 9:30 am ET, Atlanta Federal Reserve President Raphael Bostic is due to participate in a fireside chat with Richmond Federal Reserve President Tom Barkin about the importance of surveys and how survey data inform their economic outlook and policy views at the annual Central Bank Business Survey Conference.

Barkin is also scheduled to discuss the “Outlook for the U.S. Economy and Fed Policy” in a Market News International webinar at 11 am ET.

At 12:30 pm, St. Louis Federal Reserve Interim President Kathleen O’Neill Paese is due to speak at an event co-sponsored by the Association for Corporate Growth Kentucky, Financial Executives International Louisville, and CFA Society Louisville.

The Treasury Department is scheduled to announce the results of this month’s auction of $24 billion worth of thirty-year bonds at 1 pm ET.

At 2 pm ET, Federal Reserve Chair Jerome Powell is due to participate in a policy panel discussion before the 24th Jacques Polak Annual Research Conference.

Stocks In Focus

Shares of Virgin Galactic (SPCE) are skyrocketing in pre-market trading after the space tourism company reported a narrower than expected third quarter loss on revenues that exceeded analyst estimates. The company also provided upbeat fourth quarter guidance.

Financial technology company Affirm Holdings (AFRM) is also seeing significant pre-market strength after reporting better than expected fiscal first quarter revenues.

Meanwhile, shares of Arm Holdings (ARM) may come under pressure after the semiconductor technology company reported fiscal second quarter revenues that exceeded analyst estimates but provided a disappointing revenue forecast for the current quarter.

Medical technology company Becton, Dickinson and Company (BDX) may also move to the downside after reporting weaker than expected fiscal fourth quarter earnings.