Dow Futures Gain on Stimulus Hopes; Jobless Claims in Focus

The Thursday Market Minute

  • Global stocks extend gains on U.S. stimulus hopes as lawmakers press ahead with talks of targeted support.
  • House Speaker Pelosi and Treasury Secretary Mnuchin remain engaged in negotiations as President Trump pushes for a ‘piecemeal’ deal before next month’s elections.
  • Trump tells Fox Business that stimulus talks are progressing, and could include more than support for the airline sector.
  • Weekly jobless claims could upend risk sentiment, but Wall Street is looking to extend its best week since August heading into the teeth of the third quarter earnings season.
  • Morgan Stanley agrees to pay $7 billion to buy investment management firm Eaton Vance.
  • European stocks extend gains, rising to a four-week high, even as coronavirus infections continue to surge and lockdown discussions accelerate as cooler weather sets in.
  • Oil prices edge higher following a surprise drawdown in U.S. gasoline stocks suggests a possible uptick in domestic energy demand.
  • U.S. equity futures suggest a firmer open on Wall Street after weekly jobless claims fell to 840,000, just ahead of the Street consensus forecast of 820,000.

U.S. equity futures extended gains Thursday, pulling Wall Street benchmarks past the highest levels in more than a month, as markets continue to bet on near-term stimulus from Washington  and the potential for a decisive result from the November Presidential elections.

House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin have continued talks aimed at providing at least some relief to the coronavirus-hit economy, even after President Donald Trump ordered an end to negotiations earlier this week. 

Trump, as well as Pelosi, have indicated that a smaller, more targeted relief agreement is possible, but a more comprehensive deal will likely need to wait until after the November election, which polls continue to suggest will result in a Democratic Congress and a potential ‘Blue Wave’ that could deliver both a Joe Biden Presidency and control of both the Senate and the House.

In the meantime, targeted assistance for the airline industry, which is weighing the furlough of tens of thousands of workers, as well as the Federal Reserve’s willingness to provide deeper monetary support in the form of accelerated monthly bond purchases and years of near-zero interest rates, continue to put a floor under U.S. stocks, which are having their best week since early August. 

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