Stock Futures Rise After Jobless Claims Top Estimates.

Stock Futures Rise After Jobless Claims Top Estimates.


According to Yahoo Finance contracts on the three major indices pushed into positive territory after data showed new weekly jobless claims fell more than expected last week, even as businesses contended with myriad new stay-in-place measures across states.

 

S&P 500 and Dow futures each pointed to slightly higher opens, after trading mostly lower over the course of the overnight session. This came after the S&P 500 eked out another all-time closing high at the end of a muted trading day on Wednesday, as investors paused after November’s breakneck rally.

 

More upbeat news around drugmakers’ coronavirus vaccines emerged this week, though these did not trigger the outsized moves in the broader market seen last month. Britain became the world’s first country to grant emergency authorization for Pfizer and BioNTech’s COVID-19 vaccine and is set to begin shots within days.

 

Though emergency use authorization of the vaccine is still being reviewed in the U.S. by the Food and Drug Administration, officials have expressed optimism about first doses getting rolled out in the middle of December.

 

Still, Americans will continue to contend with the coronavirus pandemic in the meantime until the vaccine becomes available on a widespread basis. Robert Redfield, The Centers for Disease Control and Prevention director, said during a virtual event Wednesday that December, January and February are likely “going to be the most difficult in the public health history of this nation, largely because of the stress that’s going to be put on our health-care system.”

 

He added that COVID-19 deaths could total nearly 450,000 in the U.S. in February, rising rapidly from the more than 270,000 reported to date.

 

With a tough winter left to endure, some lawmakers have amplified calls to pass another round of fiscal stimulus before year-end. House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer each said they supported a bipartisan group of lawmakers’ recently unveiled $908 billion stimulus proposal, despite the sum being less than the $2 trillion packages the Democratic lawmakers had sought previously.

 

President-elect Joe Biden also endorsed the bill and suggested that it would be the start of a more comprehensive suite of relief legislation once he is inaugurated in January.

 

Markets, however, have been bracing for a stimulus package for months, and many economists have baked in expectations of further fiscal stimulus into their baseline outlooks for U.S. economic activity. That may leave little further upside for equities to trade around stimulus news, unless the eventual legislation is much larger in size and scope than currently anticipated, according to some analysts.

 

“I do think that we will have a deal, but the problem is the market is already anticipating it,” Bill Baruch, Blue Line Futures President, told Yahoo Finance. “Now I am bullish, and I think the path of least resistance is higher for stocks, but one thing again is, what are the markets’ expectations?”

 

“That $2 trillion headlines that everybody had for months is dissipating, and markets are going to have to settle for a bit less. And when they do get it, is it going to be a buy the rumour, sell the news event? So those are things that are going through my mind when I’m trying to manage risk.”

 

Jobless claims improve for the first time in three weeks

New weekly jobless claims fell for the first time in three weeks last week, and by a greater than expected margin, even as new virus-related restrictions swept the nation throughout November.

 

New claims totalled 712,000 for the week ended Nov. 28, falling from an upwardly revised 787,000 during the prior week. And continuing jobless claims, which track the number of individuals still receiving state unemployment benefits, fell to a fresh nine-month low of 5.52 million.

 

Still, the number of individuals claiming unemployment benefits in all programs remained historically elevated at 20.2 million. This includes those claiming unemployment insurance in federal programs authorized under Congress’s CARES Act from the spring. These benefits are set to expire at the end of the month without reauthorization.

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