Wall Street extended gains on Thursday and will likely end the week higher, as the index futures continue to ascend. Investor sentiment was boosted by hopes of new stimulus after President Donald Trump urged Congress to vote certain parts of the $2.4 trillion package proposed by Democrats. Meanwhile, jobless claims data suggests that the labor market is making an effort to extend recovery. Earlier this week, Trump cancelled negotiations with Democrats over their stimulus bill, but he made a u-turn and endorsed parts of it. On Thursday, he told Fox News that talks with Congress had restarted and even said that there were good chances that a deal might be reached. Still, he refused to give more details about a potential agreement.
Trump endorses the $25 billion package for airlines and a few other portions of stimulus, which are aimed at small businesses and households.
On the other side, House of Representatives Speaker Nancy Pelosi admitted that the bill to support airlines was a matter of national security, but it must go through Congress with the condition that there is a comprehensive, “bigger” bill.
Meanwhile, Democratic candidate Joe Biden has advanced in the polls more than three weeks ahead of the election.
The S&P 500 index was the best performer, gaining 0.80%. The energy sector was the main driver, rising 3.8% amid a surge in oil prices. Dow Jones added 0.43%, and Nasdaq rose 0.50%.
The Labor Department said that the number of US citizens applying for unemployment benefits for the first time fell to 840,000 last week, from a revised 849,000 in the previous week. This was the lowest weekly figure of jobless claims since March, but the number of those receiving benefits is still very high.
Asian stocks are mostly bullish on Friday, monitoring the progress of US stimulus negotiations.
Chinese markets opened for the first time this week following the Golden Week national holidays.
At the time of writing, China’s Shanghai Composite is up 1.75%, and the Shenzhen Composite has surged 2.80%. China’s services sector activity saw the fifth straight month of recovery in September. The Caixin Services Purchasing Managers Index (PMI) advanced to 54.8 last month from 54 in August. The composite PMI also pointed to continued growth, but the pace declined from August.
In Australia, the ASX 200 closed at the same level where it started the session.
Hong Kong’s Hang Seng is now down 0.22%.
Japan’s Nikkei 225 has dropped by 0.23%. Japan’s household spending declined for the 11th month in a row in August, and real wages fell for a sixth consecutive month, as consumers find it difficult to return to their pre-COVID purchasing habits.
Markets in South Korea are closed today in observance of Hangul Day.
European stocks will open higher on Friday, except for German DAX, whose futures are flashing red at the moment.
In individual corporate news, IBM stock rose over 6% after the tech giant announced that it was splitting into two public companies in an effort to go separately from its legacy business and focus on cloud computing.
Morgan Stanley agreed to acquire asset manager Eaton Vance for about $7 billion. Eaton’s share price jumped over 48%.
In the commodity market, oil prices are retreating from weekly highs after surging over 3% on Thursday. Yesterday, crude rallied as Hurricane Delta forced producers in the US Gulf Coast to halt almost 92% of output. Oil futures have gained over 10% this week, demonstrating the best weekly performance since May. Still, crude futures are giving up some gains amid a strike in major producer Norway, which may cut the country’s supply by 25%. Both WTI and Brent are down over 0.40%.
Gold is increasing on stimulus hopes and a weaker US dollar, consolidating above $1,900. The metal is now up 0.82% to $1,910. Still, it is set to end the week lower.
In FX, the dollar is under pressure amid stimulus hopes and ahead of the election. The USD Index is down 0.14% to 93.515. EUR/USD is also up 0.14%, trading at 1.1774.
The pound is stronger than the greenback but fell against the euro. The British currency is supported by persistent but cautious optimism over a post-Brexit trade deal between the UK and the EU. Both sides admitted that a deal is still doable. The UK’s deadline is on October 15, but some extension is possible.
