Futures Pointing To Roughly Flat Open 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 following the strong upward move seen late in the previous session.

Traders may be reluctant to make significant moves ahead of the release of a Commerce Department report on personal income and spending on Friday that readings on inflation said to be preferred by the Federal Reserve.

While the inflation data could impact the outlook for interest rates, traders will have to wait until next Monday to react to the report due to the markets being closed for Good Friday.

The holiday will also see Fed Chair Jerome Powell participate in a moderated discussion before the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference.

The futures remained little changed following the release of a Labor Department report showing first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended March 23rd.

A separate report released by the Commerce Department showed the U.S. economy unexpectedly grew by more than previously estimated in the fourth quarter of 2023.

Stocks fluctuated over the course of the trading session on Wednesday but managed to end the day mostly higher thanks to a late-day surge. With the upward move, the Dow and the S&P 500 snapped three-day losing streaks.

The major averages all moved to the upside, with the Dow posting a standout gain. While the Dow jumped 477.75 points or 1.2 percent to 39,760.08, the S&P 500 advanced 44.91 points or 0.9 percent to 5,248.49 and the Nasdaq climbed 83.82 points or 0.5 percent to 16,399.52.

The strength on Wall Street came as traders once again looked to pick up stocks at somewhat reduced levels after early buying interest faded over the course of Tuesday’s session.

The major averages spent much of Tuesday’s session in positive territory before coming under pressure in the final hour of trading.

A decrease by treasury yields may also have contributed to the strength in the markets amid ongoing optimism about the outlook for interest rates following the Federal Reserve’s monetary policy announcement last week.

While the Fed left interest rates unchanged, as widely expected, officials maintained their forecast for three rate cuts this year.

Following the Fed announcement, the chances of a 25 basis point rate cut in June have rebounded to 63.5 percent, according to CME Group’s FedWatch Tool.

Trading activity remained relatively subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Gold stocks showed a substantial move to the upside on the day, resulting in a 3.7 percent surge by the NYSE Arca Gold Bugs Index. With the gain, the index reached a nearly three-month closing high.

The rally by gold stocks came amid an increase by the price of the precious metal, with gold for June delivery climbing $13.50 to $2,212.70 an ounce.

Interest rate-sensitive utilities and commercial real estate stocks also saw considerable strength, driving the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index up by 2.7 percent and 2.3 percent, respectively.

Airline, banking and steel stocks also showed strong moves to the upside as the day progressed, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are surging $1.34 to $82.69 a barrel after slipping $0.27 to $81.35 a barrel on Wednesday. Meanwhile, after climbing $13.50 to $2,212.70 an ounce in the previous session, gold futures are jumping $18.20 to $2,230.90 an ounce.

On the currency front, the U.S. dollar is trading at 151.27 yen versus the 151.33 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0791 compared to yesterday’s $1.0828.

Asia

Asian stock markets turned in a mixed performance during trading on Thursday, as traders cautiously awaited key U.S. inflation data and Fed Chair Jerome Powell’s remarks on Friday.

The Australian market moved significantly higher, extending gains from the previous session, following broadly positive cues from global markets overnight.

The benchmark S&P/ASX 200 Index jumped 77.30 points or 1.0 percent to 7,896.90 after touching a record intraday high of 7,901.20. The broader All Ordinaries Index shot up 80.10 points or 1.0 percent to 8,153.70.

Meanwhile, giving up the gains from the previous session, Japanese stocks moved sharply lower. The Nikkei 225 Index tumbled 594.66 points or 1.5 percent to 40,168.07, with weakness seen across most sectors as some traders booked profits after recent strength in the markets.

Chinese stocks moved to the upside on the day, with the Shanghai Composite Index rising 17.52 points or 0.6 percent to 3,010.66. Hong Kong’s Hang Seng Index also advanced 148.58 points or 0.9 percent to 16,541.42.

New Zealand’s S&P/NZX 50 Index also climbed 94.63 points or 0.8 percent to 12,105.29, while South Korea’s Kospi fell 9.29 points or 0.3 percent to 2,745.82.

Europe

European stocks are seeing modest gains on Thursday ahead of a long Easter holiday weekend. Major European markets will be closed on Friday and Monday to celebrate Easter.

In economic news, German retail sales posted an unexpected decline in February. Data from Destatis revealed that Germany retail sales decreased 1.9 percent from January, confounding expectations for an increase of 0.3 percent.

On a yearly basis, retail sales decreased 2.7 percent in real terms, worse than economists’ forecast of 0.8 percent drop.

The British pound edged lower against peers in the wake of dovish comments from BoE’s Bailey about rate cuts.

In addition, data released earlier today showed the U.K. economy contracted in the fourth quarter, as initially estimated.

Gross domestic product fell by unrevised 0.3 percent after a 0.1 percent drop in the third quarter, according to final data from the Office for National Statistics.

The statistical office thus confirmed a technical recession towards the end of 2023. Consequently, the economy grew only 0.1 percent in 2023, much weaker than the 4.3 percent expansion seen in 2022.

While the French CAC 40 Index is up by 0.3 percent, the U.K.’s FTSE 100 Index is up by 0.2 percent and the German DAX Index is up by 0.1 percent.

In corporate news, JD Sports Fashion has surged. The British retailer of sports, fashion and outdoor brands said it expects full-year profit before tax and adjusted items to be in line with its outlook of 915 million pounds- 935 million pounds.

Renault has also risen in Paris. Following a share buyback program announced by Nissan on March 27, Renault Group sold 99.13 million shares back to Nissan, or about 2.5 percent of Nissan’s capital amounting to 358 million euros.

Spirent Communications has also soared as the telecommunications firm agreed to Keysight Technologies’ offer valuing the firm at 1.16 million pounds ($1.46 million).

On the other hand, Casino shares have plummeted as the retailer announced the effective completion of its financial restructuring.

Stratec SE shares have also plunged. The German maker of analyzer and automation systems for In-Vitro-Diagnostic registered a decline in net profit for the full year, due to a fall in sales and increased expenses.

Kontron, a IoT technology company, has also moved sharply lower after announcing its results for fiscal year 2023.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended March 23rd, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims dipped to 210,000, a decrease of 2,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to rise to 215,000 from the 210,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also edged down to 211,000, a decrease of 750 from the previous week’s revised average of 211,750.

A separate report released by the Commerce Department showed the U.S. economy unexpectedly grew by more than previously estimated in the fourth quarter of 2023.

Revised data showed real gross domestic product surged by 3.4 percent in the fourth quarter compared to the previously reported 3.2 percent jump. Economists had expected the pace of GDP growth to be unrevised.

The Commerce Department said the stronger than previously estimated growth primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment.

At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of March. The Chicago business barometer is expected to rise to 46.0 in March from 44.0 in February, but a reading below 50 would still indicate contraction.

The National Association of Realtors is due to release its report on pending home sales in the month of February at 10 am ET. Pending home sales are expected to jump by 1.5 percent in February after plunging by 4.9 percent in January.

Also at 10 am ET, the University of Michigan is scheduled to release its revised reading on U.S. consumer sentiment in the month of March.

The consumer sentiment index for March is expected to be unrevised from the preliminary reading of 76.5, which was down from 76.9 in February.

Stocks In Focus

Shares of RH (RH) are moving sharply higher in pre-market trading after the luxury home furnishings retailer reported weaker than expected fiscal fourth quarter revenue results but provided upbeat guidance for revenue growth in 2024.

Cosmetics company Estee Lauder (EL) may also see initial strength after Bank of America upgraded its rating on the company’s stock to Buy from Neutral.

Meanwhile, shares of Walgreens Boot Alliance (WBA) may move to the downside after the pharmacy chain reported fiscal second quarter results that exceeded estimates but narrowed its full-year earnings forecast.