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U.S. stocks pointed to a mixed open on Wednesday, with the Dow Jones Industrial Average likely to retreat somewhat from its historic close above a milestone at 30,000 on the day before the Thanksgiving holiday.
Markets will be closed on Thursday for Thanksgiving and will shutter early on Friday. Due to the holiday, investors will digest a full slate of U.S. economic reports Wednesday, including weekly jobless benefit claims, a report on new-home sales, and an account of the Federal Reserve’s most recent rate-setting meeting.
How are stock benchmarks faring?
- Futures for the Dow Jones Industrial Average YM00, -0.18% were off 48 points to reach 29,950, a decline of about 0.2%.
- S&P 500 index futures ES00, -0.06% were up 2.70 point at 3,634.50, up less than 0.1%
- Nasdaq-100 futures NQ00, +0.23% were up 32 points, or 0.3%, at 12,108.
On Tuesday, the Dow, S&P 500 and Russell 2000 index all closed at records.
- The Dow DJIA, +1.53% rose 454.97 points, or 1.5%, at 30,046.24, its first-ever finish at a milestone above 30,000.
- The S&P 500 index SPX, +1.61% gained 57.82 points, or 1.5%, to trade at 3,635.41.
- The Nasdaq Composite Index COMP, +1.31% rose 156.15 points, or 1.3%, to 12,036.79.
What’s driving the market?
After a record-setting day Tuesday, investors will mull a deluge of U.S. economic reports that could help to provide a fresh spark in a market buoyed by progress toward a coronavirus vaccine and growing clarity about Joe Biden’s transition to the presidency.
Thinner trading volumes headed into the Thanksgiving holiday also can have the effect of amplifying market moves in either direction.
The economic data may serve as a reminder of the challenges facing the world as COVID-19 spreads more rapidly, and before treatments become readily available. First-time filings for unemployment benefits rose again in the most recent week, the Labor Department said, defying expectations of a decline, and orders for durable goods were slightly weaker than forecast.
“Yes, vaccines have answered many questions, and we are in a much better situation today compared to the beginning of this year,” wrote Naeem Aslam, chief market analyst at AvaTrade in a daily research note.
“But, this does not change the fact that it is going to a fair amount of time before things get back on track. This means that optimism spurred by vaccine and political development maybe a little too much, and the reality is that the recovery path is still full of obstacles,” he wrote.
Indeed, the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 59.9 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.4 million.
On top of that, there are currently a record of 88,080 COVID-19 patients in U.S. hospitals, according to the COVID Tracking Project, topping the previous record of 85,870 set a day ago.
That spike comes in a week in which AstraZeneca AZN, -2.06% said its coronavirus vaccine candidate being developed with the University of Oxford can reach efficacy of around 90%, adding to a list of drugmakers, including Pfizer-BioNTech BNTX, -4.34% and Moderna MRNA, -2.44%, racing to advance a viable vaccine.
Vaccine news and reports that Biden was set to select a candidate for U.S. Treasury Secretary, former Federal Reserve Chair Janet Yellen, viewed as a steady hand for financial markets, has also helped to encourage stock buying.
“There was a lot of hedging and a lot of tension and uncertainty leading up to the election,” said Keith Lerner, chief market strategist for Truist/SunTrust Advisory Services. “Since then, we’ve just had an exhale of all those tensions one by one. And now it’s just happening at lightning speed.”
Even though the markets are largely past the big unknowns of November, and “you really are seeing such a broadening out of the rally, across sectors, industries, and stocks,” Lerner said in an interview, “sentiment is getting a bit hot.”
He’s expecting to buy any significant dips over the next few weeks, but otherwise wait until the new year to let some of the chop wind down. “The market can see the other side of this,” Lerner said of the next few weeks, which are likely to bring headlines about a spike in COVID-19 cases and decelerating economic growth.
Economic reports for Wednesday
Wednesday will bring a bevy of data, some of which have been pulled forward due to the holiday:
At 8:30 a.m. Eastern
- A report on orders for long-lasting goods for October showed a sixth-straight monthly rise, but one that was lower than forecasts
- A reading of advance trade in goods for October showed the deficit increased 1.2%
- Weekly data on jobless claims from the Labor Department showed 778,000 people filed for unemployment for the first time, marking the second weekly gain in a row
- A second-reading of gross domestic product for the third quarter confirmed an increase of 33.1%
At 10 a.m.
- New homes sales for October
- A final reading of consumer sentiment for November
- Reports on personal income and spending, and PCE, for last month
At 4 p.m.
- Minutes from the Fed’s Nov. 4-5 meeting, which comes ahead of the Federal Open Market Committee’s two-day policy meeting starting Dec. 15
Which stocks are in focus?
- Shares of Deere & Co. DE, +0.15% rallied toward a record high in premarket trading Wednesday, after the maker of agriculture, lawn care and construction equipment reported fiscal fourth-quarter profit and sales that were well above expectations, and provided an upbeat outlook.
- Shares of Gap Inc. GPS, +3.10% are in focus after the retailer late Tuesday missed Wall Street expectations for its third-quarter profit and said that the recent uptick in COVID-19 cases in several U.S. areas could weigh on store traffic.
- Nordstrom Inc. JWN, +4.73% reported after the close on Tuesday a surprise GAAP profit for its third quarter.
How are other assets performing?
- The pan-European Stoxx Europe 600 index SXXP, -0.21% was trading 0.2% lower, while the U.K.’s FTSE 100 index UKX, -0.58% was off 0.5%.
- In Asia, China’s Shanghai Composite Index SHCOMP, -1.19% closed down 1.2%, China’s CSI 300 000300, -1.27% finished the session with a 1.3% loss, while Hong Kong’s Hang Seng HSI, +0.30% booked a 0.3% gain. Japan’s Nikkei 225 NIK, +0.50% closed 0.5% higher on Wednesday.
- The ICE U.S. Dollar Index DXY, -0.09% was trading little changed at 92.209.
- Crude-oil futures CL.1, +0.73% were trading 0.7% higher at $45.24 a barrel early Wednesday
- Gold futures GOLD, -1.93% were rebounding after a strong two-day skid, trading 0.4% higher at $1,811.90 an ounce.
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