9.40am: Tech-laden Nasdaq leads US stocks higher
US stocks opened higher at the open on Thursday after the release of the minutes from the Federal Reserve’s latest rate-setting meeting provided clarity as to the central bank’s path forward.
Just after the market opened, the tech-laden Nasdaq Composite was leading the charge higher, up 120 points or 1.1% at 11,627 points.
The Dow Jones Industrial Average had added 146 points or 0.4% at 33,192 points and the S&P 500 was up 31 points or 0.8% at 4,021 points.
On the data front, US jobless claims remain at historically low levels, last week dipping to 192,000 from 195,000, below the consensus expectation of 200,000.
Pantheon Economics chief economist Ian Shepherdson said the trend in claims remains very low and stable, though the weekly prints are noisy and subject to the influence of the weather, which was substantially warmer than usual last week.
“This week has been colder, with snow in the West and Midwest, so a higher claims print next week is a decent bet,” he noted.
“More broadly, the sharp upturn in layoff announcements in recent months is yet to pass through into the claims numbers, though we expect that to change in the spring, with claims rising substantially.”
Elsewhere, US fourth quarter gross domestic product (GDP) was revised down to 2.7% from 2.9%, below the consensus of 2.9%, which Shepherdson noted as “a bit of a surprise.”
“All the net hit is in consumption, cut to 1.4% from 2.1%, with stronger investment spending only a partial offset,” he said. “The data also show that the core PCE deflator rose more quickly than previously believed, climbing at a 4.3% rate, up from the initial 3.9% estimate.”
Shepherdson pointed out that the monthly breakdown of the data will be published tomorrow, along with the January data.
“All we know is that all three components – durable goods, nondurable goods, and services – were revised up,” he said. “That doesn’t look good, though the new data don’t necessarily have anything to say about what will happen in the future.”
6.30am: Fed minutes bring clarity
US stocks are expected to push higher at the open on Thursday following a mixed showing in the previous session after the release of minutes from the last Federal Reserve meeting indicated US interest rates would stay higher for longer, at least providing some clarity on policy.
Futures tied to the Dow Jones Industrial Average (DJIA) added 54 points or 0.2% at 33,133, while those for the S&P 500 gained 0.4%, and contracts for the Nasdaq-100 rose 0.8%.
On Wednesday, the DJIA closed 84.50 points, or 0.3% lower at 33,045, while the S&P 500 fell 0.2%, but the Nasdaq Composite rose 0.1%.
Minutes from the most recent Federal Open Market Committee (FOMC) meeting, which concluded on February 1, showed that members of the central bank are resolved to keep fighting inflation with rate hikes. Inflation “remained well above” the Fed’s 2% target and the labor market “remained very tight, contributing to continuing upward pressures on wages and prices,” according to the minutes.
James Hughes, Global Head of Brand for Scopemarkets commented: “Yesterday’s FOMC meeting minutes confirmed investors worst fears that the rate hike crusade would be continuing for a while longer yet, news that has arguably served to draw a line under Wall Street’s latest sell-off.
“Right now, markets appear to be welcoming this clarity with futures indicating a positive start on Thursday whilst some glimmers of optimism in last night’s after-hours earnings news also offered further cause for cheer.”
“Economic data is relatively thin on the ground today with a flurry of updates dominating the agenda and we’re getting towards the tail end of earnings season, although numbers from Moderna and Liberty Global both have the ability to be something of standouts at either end of the session,” he added.
In economic data, the latest GDP and weekly jobless claims data are both scheduled to be released at 8.30am ET on Thursday.
Additionally, Atlanta Fed President Raphael Bostic will speak at an event hosted by the Atlanta Fed on Thursday morning, while San Francisco Fed President Mary Daly will take part in a fireside chat in the afternoon.
On the corporate front, Nasdaq futures got a boost from chip firm Nvidia, which rose more than 8% pre-market following better-than-expected fourth-quarter earnings and revenue released after-hours on Wednesday.
A big batch of earnings reports are due out on Thursday including from Alibaba, Papa John’s, Wayfair and Bath & Body Works, while after the bell this afternoon, investors will hear from Beyond Meat, Block, Warner Bros. Discovery and Carvana, among others.