Jason Photography
Stock index futures are looking for direction on Thursday after the jobless claims numbers rose.
Dow futures (INDU) were -0.1%S&P futures (SPX) was flat, and Nasdaq 100 (NDX:IND) futures were up by 0.1%.
The 10-year Treasury yield (US10Y) remained unchanged at 3.78%. 2 years return (US2Y) fell 3 basis points to 4.51%.
“With less than a week to go until the Fed’s next decision, yesterday delivered another upbeat surprise to markets after the Bank of Canada unexpectedly raised interest rates by 25 basis points,” said Jim Reid of Deutsche Bank. “Now this may just be one central bank, but it comes on the back of a similar surprise rally from the RBA the day before, so investors are starting to see a pattern emerging here and there has been significant (global) bond selling as a result.”
“Recent developments also run counter to the prevailing narrative that central banks are about to pause raising interest rates, especially given that Canada was one of the first countries to officially signal a pause in January,” Reid said. “The big question now is whether the Fed may follow up with a hike of its own next Wednesday, or whether it will finally keep interest rates on hold after 10 consecutive hikes.”
Fed funds futures still expect a pause in June, though the odds are now down to less than 70%. More importantly, interest rate cuts had been delayed until January, so the odds of a cut were slightly higher.
Initial Weekly Jobless Claims came in at 261K vs. 235K expected.
“The US labor market has a host of mixed signals for investors to choose from these days,” said Paul Donovan, chief economist at UBS.
Among active stocks, GameStop (GME) tumbled after its CEO was fired.
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