U.S. stock-index futures pointed to a slight pullback for Thursday after strong gains in regular trade Wednesday, as investors braced for an updated reported on weekly unemployment, among other economic reports, that may offer further insight into the impact of the COVID-19 pandemic.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YMM20, -0.48% shed 95 points, or 0.4%, at 23,263, those for the S&P 500 index ESM20, -0.48% gave up 10.65 points, or 0.4%, at 2,778.50, while Nasdaq-100 futures NQM20, -0.57% retreated 32.50 points, or 0.3%, at 8,608.75.
On Wednesday, the Dow DJIA, +1.98% advanced 456.94 points, or 2%, to finish at 23,475.82. The S&P 500 SPX, +2.29% gained 62.75 points, or 2.3%, to end at 2,799.31. The Nasdaq Composite Index COMP, +2.80% climbed 232.15 points, or 2.7%, to close at 8,495.38.
For the week so far, the Dow is off 3.2%, the S&P 500 is down 2.6% and the Nasdaq is down 1.8%, as of Wednesday’s close, with the benchmarks threatening to end a weekly win streak at two straight weeks.
What’s on investors’ minds?
Is Wall Street inured to awful weekly data from the labor market after a month of reports indicating that millions are out of work due to shutdown procedures in place to help slow the spread of COVID-19?
Thursday’s action could be telling, with initial jobless claims in the week ended April 18 likely to show an increase of at least 4 million people, with estimates ranging as high as 5.25 million, according to the latest MarketWatch survey of economists.
That figure would push total claims to at least 25 million after a month that has already seen total claims surge from 200,000 on average to above 22 million.
Read:Expanded unemployment benefits: Who qualifies, how to apply
Job losses underline the yearning to restart the economy soon, and efforts to achieve that goal have at least partly supported gains for equity markets, which have risen in two of the past three sessions.
Speaking during a Wall Street Journal podcast, Vice President Mike Pence said the White House hopes the coronavirus epidemic to be “largely in the past” by early June, though America’s No. 2 stopped short of predicting when the economy will running at full tilt.
“We truly do believe as we move forward, with responsibly beginning to reopen the economy in state after state around the country, that by early June, we could be at a place where this coronavirus epidemic is largely in the past,” he told the Journal.
Reopening the U.S. economy is likely to be an uneven affair, with President Donald Trump, during a daily briefing about the country’s response to the pandemic Wednesday, saying that he “strongly” disagreed with plans by Georgia Gov. Brian Kemp to restart much of the state’s economy as early as Friday.
Meanwhile, investors have been digesting unsurprisingly bad corporate quarterly earnings results. On a year-over-year basis, the earnings-per-share growth estimate is negative-13.6%, and that rate would be negative-11.8%, if the oil sector were excluded, according to data from Refinitiv as of midday Wednesday. Of the 84 S&P 500 companies that have reported so far, 66.7% have posted results above consensus estimates, while 28.6% have missed the mark. By comparison, over the past four quarters, 74% of companies beat estimates and 19% missed, according to the analytics company.
Which stocks are in focus?
Looking ahead, investors will watch for quarterly results from Eli Lilly LLY, +2.64%, The Hershey Co. HSY, +1.17% and Citrix Systems CTX, +0.80% before the bell, and Intel Corp. INTC, +6.63%, Capital One Financial COF, +0.70% and Edwards Lifesciences Corp. EW, +0.23% after the closing bell Thursday, according to FactSet data.
What other economic data are ahead?
A reading of manufacturing, PMI Composite, is due at 9:45 a.m. Eastern, and a report on new home sales is due at 10 a.m., while the Kansas City Federal Reserve’s manufacturing index is set to be released at 11 a.m. At 4:30 p.m., an update of the Fed’s balance sheet is due.
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