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S&P 500 futures are gaining about 1% in premarket trading as investors cheer the latest news about coronavirus aid package negotiations.
Previously, Democrats unveiled a new package worth $2.2 trillion while Republicans signaled that they were ready for a deal worth $1.5 trillion.
The latest reports indicated that Republicans were ready to increase the size of their proposal. However, they believe that the new aid package should be below $2 trillion.
The market has almost lost hope for a new round of stimulus but negotiations have intensifed in recent days, so there is an increased chance of a positive outcome.
The U.S. economy clearly needs another aid package to support consumer activity, so expectations of a new aid bill provide material support to stocks.
Initial Jobless Claims Decline To 837,000
U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports.
Initial Jobless Claims declined from 870,000 to 837,000. Analysts expected Initial Jobless Claims of 850,000. Continuing Jobless Claims declined from 12.75 million to 11.77 million compared to analyst consensus of 12.23 million.
Meanwhile, Personal Income declined by 2.7% month-over-month while Personal Spending increased by 1%.
Employment reports were significantly better than expected and may provide an additional boost to the market. Personal Income remains under pressure so the U.S. needs another round of stimulus to ensure the continued growth in Personal Spending which supports the economy.
Manufacturing PMI Reports In Focus
In addition to U.S. employment reports, traders will have a chance to evaluate the final reading of Manufacturing PMI for September.
Manufacturing PMI reports from other countries signaled that the economic recovery continued. China’s Manufacturing PMI decreased from 53.1 in August to 53.0 in September, Euro Area Manufacturing PMI grew from 51.7 to 53.7 while UK Manufacturing PMI decreased from 55.2 to 54.1. Numbers above 50 show expansion.
The upcoming PMI reports for the services segment are set to show a less encouraging picture but stocks may still gain additional ground in case U.S. Manufacturing PMI is better than expected.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire