Stock futures edged lower Thursday morning after a selloff a day earlier.
Each of the three major indexes dropped by the most since October on Wednesday amid a batch of tepid earnings results and after the Federal Open Market Committee issued a January monetary policy statement that pointed to moderating growth in the virus-stricken economy. Still, the central bank reiterated its commitment to keeping interest rates low and asset purchases robust as the economy weathers the COVID-19 pandemic.
“It was a positive from the standpoint of reinforcing the dovishness of the Fed that they indicated that economic growth and activity is moderating,” Tony Rodriguez, Nuveen head of fixed income, told Yahoo Finance of the Fed’s statement and Fed Chair Jerome Powell’s press conference. “Acknowledging that reinforces the idea that they’re going to be very patient, certainly with the policy rate, but also from the standpoint of quantitive easing, balance sheet growth and the talk of a taper. That is definitely not a 2021 conversation that they are willing or expecting to have.”
Further data on the strength of the U.S. economy was in focus on Thursday. U.S. gross domestic product (GDP) grew for a second straight quarter in the final three months of 2020, albeit with slowing momentum heading into the new year, largely as a result of weakening consumer spending and a still-weak labor market. Weekly jobless claims pulled back from the prior week’s elevated levels, but held at a historically high level of more than 800,000.
Earnings season has also been chugging along, and shares of some heavily weighted companies that reported results after the closing bell on Wednesday dipped before market open. Tesla’s (TSLA) stock dropped more than 4% after the company posted profit that fell short of estimates, though revenue hit a quarterly record of more than $10 billion. Apple’s (AAPL) stock fell after CEO Tim Cook said during the company’s earnings call that he expected a second-quarter deceleration in wearables and services sales growth, overshadowing fiscal first-quarter revenue and earnings that topped expectations. Facebook (FB) shares fluctuated between gains and losses after topping user growth, sales and profit estimates, though the company warned about “significant uncertainty” over the ad environment in 2021 amid the pandemic.
Shares of some of the heavily shorted stocks that had been rocketing higher over the last several sessions resumed their jumps higher in early trading but still held sharply higher on the week. GameStop (GME) more than doubled on Wednesday and jumped another 45% in early trading. Shares of AMC (AMC) dipped sligtly after-hours, following an extraordinary run-up of 300% during Wednesday’s regular trading day. BlackBerry (BB), Express (EXPR) and Bed Bath & Beyond (BBBY) – also darlings of Reddit’s r/wallstreetbets forum as of late – traded more mutedly in early trading.
“This will work until it doesn’t,” Jeff Sherman, DoubleLine Capital chief investment officer, told Yahoo Finance on Wednesday. “It’s this concentrated fervor that’s going into single names, and so I don’t think it has ramifications for the broad market. But this is exactly what we talk about when we talk about blow-off tops in market, euphoria.”
8:44 a.m. ET: 4Q GDP comes in slightly below expectations, weekly jobless claims improve
New economic data out Thursday morning painted a mixed picture of the U.S. economy.
Fourth-quarter gross domestic product, tracking economic activity in the final three months of 2020, expanded at a 4.0% annualized clip, falling short of the 4.2% increase expected, according to Bloomberg data. This followed a record 33.4% annualized increase in the third quarter, which in turn had followed a record plunge in the second quarter. Personal consumption increased at an only 2.5% annualized rate, or well below the 3.1% expected. All told, gross domestic product remained below pre-pandemic levels from the fourth quarter of 2019.
Meanwhile, weekly jobless claims for the week ended January 23 improved to 847,000, beating estimates for 875,000. However, the previous week’s new claims were revised up to 914,000 from 900,000. Continuing claims, measuring the total number of individuals still receiving state benefits, fell below 5 million for a back-to-back weeks and reached the lowest level since mid-March.
7:25 a.m. ET: Thursday: Stock futures point to a mixed open ahead of GDP, jobless claims data
Here were the main moves in markets, as of 7:25 a.m. ET Thursday:
S&P 500 futures (ES=F): 3,745.75, down 1.5 points or 0.04%
Dow futures (YM=F): 30,247.00, up 58 points, or 0.19%
Nasdaq futures (NQ=F): 13,048.5, down 57 points or 0.43%
Crude (CL=F): -$0.07 (-0.13%) to $52.78 a barrel
Gold (GC=F): -$6.50 (-0.35%) to $1,842.40 per ounce
10-year Treasury (^TNX): unchanged, yielding 1.0140%
6:03 p.m. ET Wednesday: Stock futures open lower
Here were the main moves in markets, as of 6:03 p.m. ET Wednesday
S&P 500 futures (ES=F): 3,735.5, down 8.75 points or 0.23%
Dow futures (YM=F): 30,189.00, flat
Nasdaq futures (NQ=F): 13,046.75, down 58.75 points or 0.45%
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This article is auto-generated by Algorithm Source: finance.yahoo.com