Mixed Economic Data May Lead To Choppy Trading On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction after ending the previous session mostly higher.

Traders may be reluctant to make significant moves as they digest the latest batch of U.S. economic data, including a Commerce Department report showing an unexpected rebound in retail sales in the month of August.

The Commerce Department said retail sales climbed by 0.7 percent in August after plunging by a revised 1.8 percent in July.

The rebound surprised economists, who had expected retail sales to decrease by another 0.8 percent compared to the 1.1 percent slump originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales surged up by 1.8 percent in August after tumbling by a revised 1.0 percent in July.

Economists had expected ex-auto sales to edge down by 0.2 percent compared to the 0.4 percent drop originally reported for the previous month.

Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits rebounded by slightly more than expected in the week ended September 11th.

The report said initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week’s revised level of 312,000.

Economists had expected initial jobless claims to rise to 328,000 from the 310,000 originally reported for the previous week.

The modest increase came after initial jobless claims fell to their lowest level since March of 2020 in the previous week.

The Philadelphia Federal Reserve also released a report showing growth in Philadelphia-area manufacturing activity unexpectedly reaccelerated in the month of September.

Stocks initially showed a lack of direction during trading on Wednesday but climbed firmly into positive territory as the day progressed. With the advance on the day, the major averages largely offset the downturn seen on Tuesday.

The major averages finished the session near their best levels of the day. The Dow climbed 236.82 points or 0.7 percent to 34,814.39, the Nasdaq advanced 123.77 points or 0.8 percent to 15,161.53 and the S&P 500 jumped 37.56 points or 0.9 percent to 4,480.70.

The strength that emerged on Wall Street may partly have reflected bargain hunting following the downward trend seen over the past several sessions.

The Dow ended Tuesday’s trading at its lowest closing level in almost two months, while the tech-heavy Nasdaq closed lower for the fourth straight session.

Traders were also digesting the latest batch of data, including a report from the Fed showing industrial production in the U.S. increased by slightly less than expected in the month of August.

The report said industrial production rose by 0.4 percent in August after climbing by a downwardly revised 0.8 percent in July.

Economists had expected industrial production to increase by 0.5 percent compared to the 0.9 percent advance originally reported for the previous month.

The Fed noted late-month shutdowns related to Hurricane Ida held down the gain in industrial production by an estimated 0.3 percentage points.

A separate report from the Labor Department unexpectedly showed U.S. import prices decreased for the first time since October of 2020 in the month of August.

The Labor Department said import prices fell by 0.3 percent in August after climbing by an upwardly revised 0.4 percent in July.

The drop surprised economists, who had expected import prices to rise by 0.3 percent, matching the increase originally reported for the previous month.

Meanwhile, the report said export prices increased by 0.4 percent in August after jumping by a downwardly revised 1.1 percent in July.

Economists had expected export prices to advance by 0.5 percent compared to the 1.3 percent surge originally reported for the previous month.

Energy stocks saw substantial strength on the day, benefiting from a sharp increase by the price of crude oil.

Reflecting the strength in the energy sector, the NYSE Arca Oil Index soared by 4.3 percent, the Philadelphia Oil Service Index surged by 3.8 percent and the NYSE Arca Natural Gas Index shot up by 3.6 percent.

Significant strength was also visible among steel stocks, as reflected by the 2.5 percent jump by the NYSE Arca Steel Index. The index bounced off its lowest closing level in almost two months.

Banking stocks also showed a strong move to the upside over the course of the session, driving the KBW Bank Index up by 1.7 percent.

Biotechnology, software and tobacco stocks also saw notable strength, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are slipping $0.39 to $72.22 a barrel after spiking $2.15 to $72.61 a barrel on Wednesday. Meanwhile, after falling $12.30 to $1,794.80 an ounce in the previous session, gold futures are plunging $31 to $1,763.80 an ounce.

On the currency front, the U.S. dollar is trading at 109.62 yen versus the 109.38 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1755 compared to yesterday’s $1.1817.

Asia

Asian stocks ended broadly lower on Thursday, with fears over China Evergrande Group’s financial woes and the announcement of more government scrutiny of Macau casinos denting sentiment. Investors also awaited next week’s Federal Reserve meeting for more clues on the tapering of its bond-buying programs.

China’s Shanghai Composite Index tumbled 49.13 points, or 1.3 percent, to 3,607.09, with property stocks falling as Evergrande Group appeared likely to be unable to repay all of the $89 billion it owes banks and other bondholders.

Hong Kong’s Hang Seng Index slumped 365.36 points, or 1.5 percent, to 24,667.85, hit by heavy declines in the technology and casino sectors.

Japanese shares ended lower as investors continued to take profits after a recent rally that was led by expectations for fresh economic stimulus under new political leadership. Weak exports data for August also weighed on the markets.

The Nikkei 225 Index fell 188.37 points, or 0.6 percent, to 30,323.34 after having hit a 31-year high on Monday. The broader Topix closed 0.3 percent lower at 2,090.16.

Shippers, property firms and technology heavyweights led losses, while energy stocks gained ground after a sharp jump in oil prices overnight.

Meanwhile, Australian markets rose notably as higher oil prices helped lift energy stocks. The benchmark S&P/ASX 200 Index climbed 43.20 points, or 0.6 percent, to 7,460.20 even as data showed employment in the country fell sharply in August.

The broader All Ordinaries Index gained 36.60 points, or 0.5 percent, to finish at 7,759.80. Beach Energy, Oil Search, Santos and Woodside Petroleum all climbed over 2 percent as oil steadied near a six-week high on signs of sliding U.S. stockpiles and hopes of robust demand growth next year.

Seoul stocks ended lower to snap a four-session rally, dragged down by a slump in major tech heavyweights. The Kospi dropped 23.31 points, or 0.7 percent, to 3,130.09.

Chip giants Samsung Electronics gave and SK Hynix gave up 1.2 percent and 3.3 percent, respectively. SK Innovation tumbled 4.4 percent after its shareholders approved a proposal to separate its battery business into a new company.

Europe

European stocks have moved higher on Thursday despite a weak handover from Asia, where the debt crisis at China Evergrande Group and Beijing’s latest push to rein in private industries hurt sentiment. Sentiment was boosted after data showed the euro area trade surplus increased in July on higher shipments.

According to the first estimate from Eurostat, the trade surplus increased to a seasonally adjusted 13.4 billion euros in July from 11.9 billion euros in June. Exports increased 1 percent month-on-month, while imports grew only 0.3 percent.

On an unadjusted basis, exports of goods registered annual growth of 11.4 percent and imports posted a 17.1 percent expansion.

While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index is up by 0.7 percent and the U.K.’s FTSE 100 Index is up by 0.4 percent.

Lagardere shares have soared in Paris after Vivendi reached an agreement to buy activist investor Amber Capital’s 17.9 percent stake in the French media and retail group.

German chemicals giant BASF has also risen after announcing a strategic partnership with Chinese energy technology company Contemporary Amperex Technology Co.

Wacker Chemie AG has also moved to the upside. The chemicals company once again raised its full-year guidance for sales and EBITDA, citing the sustained positive performance of its business.

Food and beverages company GEA Group AG has also advanced as it received an order from Denmark-based biotechnology customer Novozymes for a new functional protein plant in Nebraska, USA.

Ryanair Holdings has also jumped in London after the discount airline raised its traffic forecast over the next five years. EasyJet and British Airways owner IAG have also moved higher.

Wickes has also shown a notable move to the upside. The home improvement retailer raised its annual profit forecast after a strong first-half performance.

Rental equipment provider Ashtead Group has also moved significantly higher after raising its outlook for full-year performance.

Meanwhile, Rio Tinto has fallen as the mining giant issued a statement on penalty assessment by the Australian Taxation Office in connection with an isolated borrowing used to pay an intragroup dividend in 2015.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits rebounded by slightly more than expected in the week ended September 11th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week’s revised level of 312,000.

Economists had expected initial jobless claims to rise to 328,000 from the 310,000 originally reported for the previous week.

The Commerce Department released a separate report on Thursday showing retail sales unexpectedly rebounded in the month of August.

The Commerce Department said retail sales climbed by 0.7 percent in August after plunging by a revised 1.8 percent in July.

The rebound surprised economists, who had expected retail sales to decrease by another 0.8 percent compared to the 1.1 percent slump originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales surged up by 1.8 percent in August after tumbling by a revised 1.0 percent in July.

Economists had expected ex-auto sales to edge down by 0.2 percent compared to the 0.4 percent drop originally reported for the previous month.

Growth in Philadelphia-area manufacturing activity unexpectedly reaccelerated in the month of September, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index for current activity jumped to 30.7 in September from 19.4 in August, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to edge down to 19.0.

Looking ahead, the Philly Fed said the survey’s future general activity and new orders indexes continued to moderate, but the surveyed firms remained generally optimistic about growth over the next six months.

At 10 am ET, the Commerce Department is due to release its report on business inventories in the month of July. Economists expect business inventories to increase by 0.5 percent.

The Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds at 11 am ET.

Stocks In Focus

Shares of Fisker (FSR) are seeing pre-market weakness after Bank of America downgraded its rating on the electric vehicle company’s stock to Neutral from Buy.

Plant-based meat producer Beyond Meat (BYND) may also move to the downside after Piper Sandler downgraded its rating on the company’s stock to Underweight from Neutral.

On the other hand, shares of DoorDash (DASH) are likely to see initial strength after Bank of America upgraded its rating on the online food delivery company to Buy from Neutral.