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U.S. Stocks May Open Higher As Congress Certifies Biden's Victory

wallstreet sept05 07jan21 lt

After ending the previous session mixed, stocks are likely to move mostly higher in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 116 points.

The upward momentum on Wall Street comes as U.S. lawmakers certified President-elect Joe Biden's victory after the process was delayed by several hours by supporters of President Donald Trump storming the U.S. Capitol building.

After the Capitol building was finally secured, several Republican lawmakers abandoned plans to object to the certification of results from a number of states, although GOP opposition still led to a drawn out process.

Trump said in a statement following the vote that there would be an "orderly transition" of power to Biden but continued his fraudulent claims of widespread voter fraud that helped spark the riot at the Capitol.

The certification of Biden's victory along with Democratic victories in Georgia's Senate runoff elections will give Democrats control of the House, Senate and the White House.

Traders seem optimistic a Democratic-controlled government will lead to additional stimulus, but with the narrow margin in the Senate preventing major tax hikes or other policies that negatively affect big business.

Nonetheless, overall trading activity may be somewhat subdued ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

A day ahead of the release of the monthly report, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended January 2nd.

The report said initial jobless claims edged down to 787,000, a decrease of 3,000 from the previous week's upwardly revised level of 790,000.

Economists had expected jobless claims to rise to 800,000 from the 787,000 originally reported for the previous week.

Meanwhile, the Commerce Department released a separate report showing the U.S. trade deficit widened by more than expected in the month of November.

Not long after the start of trading, the Institute for Supply Management is due to release its report on service sector activity in the month of December.

The ISM's services PMI is expected to edge down to 54.6 in December from 55.9 in November, although a reading above 50 would still indicate growth.

The Dow moved sharply higher during trading on Wednesday and ended the session at a new record closing high, while the tech-heavy Nasdaq saw considerable volatility over the course of the trading day before closing firmly in the red.

While the Nasdaq slid 78.17 points or 0.6 percent to 12,740.79, the Dow jumped 437.80 points or 1.4 percent to 30,829.40 and the S&P 500 climbed 21.28 points or 0.6 percent to 3,748.14.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged up by 1.6 percent, while China's Shanghai Composite Index advanced by 0.7 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has fallen by 0.5 percent, the French CAC 40 Index and the German DAX Index are both up by 0.4 percent.

In commodities trading, crude oil futures are inching up $0.07 to $50.70 a barrel after climbing $0.70 to $50.63 a barrel on Wednesday. Meanwhile, after plunging $45.80 to $1,908.60 an ounce in the previous session, gold futures are rising $8.60 to $1,917.20 an ounce.

On the currency front, the U.S. dollar is trading at 103.60 yen versus the 103.04 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2267 compared to yesterday's $1.2327.

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