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Stocks May Give Back Ground After Yesterday's Rally - U.S. Commentary


Following the rally seen in the previous session, stocks may give back ground in early trading on Thursday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 20 points.

Traders may look to cash in on yesterday's substantial gains, which came on the heels of "dovish" comments from Federal Reserve Chairman Jerome Powell.

Lingering uncertainty about trade between the U.S. and China may weigh on the markets ahead of this weekend's meeting between President Donald Trump and Chinese President Xi Jinping.

Trump and Xi are due to hold a dinner meeting on Saturday on the sidelines of the G20 summit in Buenos Aires, Argentina, although a substantive breakthrough is seen as unlikely.

On the U.S. economic front, the Labor Department released a report showing another unexpected increase in initial jobless claims in the week ended November 24th.

The report said initial jobless claims climbed to 234,000, an increase of 10,000 from the previous week's unrevised level of 224,000. Economists had expected jobless claims to edge down to 220,000.

Meanwhile, a separate report from the Commerce Department showed personal income and spending both increased by more than anticipated in the month of October.

The Commerce Department said personal income climbed by 0.5 percent in October after edging up by 0.2 percent in September. Economists had expected income to rise by 0.4 percent.

Additionally, the report said personal spending advanced by 0.6 percent in October after rising by 0.2 percent in the previous month. Spending had also been expected to increase by 0.4 percent.

Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on pending home sales in the month of October. Pending home sales are expected to climb by 0.5 percent in October, matching the increase seen in September.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Later in the day, the Fed is due to release the minutes of its monetary policy meeting held earlier this month. The central bank decided to leave interest rates unchanged at the meeting.

After moving moderately higher early in the session, stocks saw further upside over the course of the trading day on Wednesday. The major averages climbed firmly into positive territory, further offsetting the weakness seen last week.

The major averages ended the session at their best levels of the day. The Dow surged up 617.70 points or 2.5 percent to 25,366.43, the Nasdaq spiked 208.89 points or 3 percent to 7,291.59 and the S&P 500 soared 61.61 points or 2.3 percent to 2,743.78.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, although Chinese stocks bucked the uptrend. Japan's Nikkei 225 Index rose by 0.4 percent, while Australia's S&P/ASX 200 Index climbed by 0.6 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has inched up by 0.1 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.'s FTSE 100 Index is up by 0.6 percent.

In commodities trading, crude oil futures are jumping $1.01 to $51.30 a barrel after tumbling $1.27 to $50.29 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,226, up $2.40 compared to the previous session's close of $1,223.60. On Wednesday, gold jumped $10.20.

On the currency front, the U.S. dollar is trading at 113.30 yen compared to the 113.68 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1382 compared to yesterday's $1.1366.

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