Blog

Text size

Stocks edged higher on Thursday as investors’ attention remained focused on the health of the economy and how it could affect the Federal Reserve’s monetary policy trajectory.

future for the

Dow Jones Industrial Average
gained 30 points, or 0.1%, after the index advanced 416 points on Wednesday to close at 32,812.

S&P500
futures signaled a 0.2% start in the green with tech heavyweights

Nasdaq
is expected to increase by 0.2%; the S&P 500 and the Nasdaq rose 1.6% and 2.6% respectively on Wednesday.

Overseas, the pan-European

Stoxx 600
increased by 0.4% and that of Tokyo

Nikki 225
ended up 0.7%.

After posting gains on Wednesday in a session that ended two days of losses, stocks were more subdued on Thursday as investors braced for Friday’s U.S. jobs report, which comes in late. is established as one of the most important events of the week.

“One thing we can say for sure is that August hasn’t been boring so far and we’ve only had three days,” said Jim Reid, strategist at Deutsche Bank. “U.S. equity futures pause to breathe.”

The economy remains in focus as the Fed is expected to continue its course of aggressively tightening monetary policy in a bid to rein in runaway inflation, which is at its highest level in four decades.

The Fed has already raised interest rates four times this year, including two mega-rate hikes of 75 basis points in June and July – the largest since 1994 – and is expected to continue raising rates this year before slow down in 2023. The risk is that a fall in economic demand, when it should make it possible to control inflation, triggers a recession.

Signs of a weakening economy, such as a deterioration in the labor market that would be revealed in US employment data, could dampen the pace of Fed tightening. Ahead of Friday’s jobs data, the day ahead includes more economic indicators, including unemployment insurance claims for the past week and the trade deficit for June.

“The stories are currently struggling to be consistent as stocks have recently rebounded from weaker growth which has been seen as helping to limit how much the Fed can increase,” Reid said. “However, stocks rallied yesterday on stronger economic data, regardless of the Fed’s potential impact.”

Earnings season remains in focus, with companies such as

Ali Baba

(symbol: BABA),

Conoco Phillips

(COP),

AMC Entertainment

(AMC),

To block

(SQ),

Lyft

(LYFT), and

Discovery of Warner Bros.

(WBD) reporting the results.

In commodities, oil prices are holding up after plunging on Wednesday following a surprise rise in inventories and the decision by the OPEC+ domestic producers group to increase production by 100,000 barrels per month. day.

U.S. benchmark West Texas Intermediate crude futures gained less than 1% to around $91 a barrel, after trading as low as $96 on Wednesday.

“A break below $90 is now a very real possibility, which is quite remarkable given the tension in the market and the limited scope for relief,” said Craig Erlam, analyst at broker Oanda. “But the talk of the recession is getting louder and if it becomes reality, that would probably resolve some of the imbalance.”

Here are five stocks in motion on Thursday:

SoftBank Group

(9984.Japan) gained 2.6% in Tokyo and

Ali Baba

rose 2% in premarket trading in the United States following a report that the Japanese tech investor positioned itself to sell sharply its 24% stake in the Chinese e-commerce giant.

Fortinet

(FTNT) fell 8% in premarket trading after the software group slashed its fiscal year services revenue forecast to $2.62 billion from $2.67 billion, down from compared to previous forecasts of $2.7 billion. The company said it expects full-year adjusted earnings of between $1.01 and $1.06 per share, compared to the Wall Street consensus estimate of 1.03. $.

Fortinet

guided for revenue between $4.35 billion and $4.4 billion, while analysts expected $4.39 billion.

Reserve credits

(BKNG) fell 3% in premarket trading after the online travel agency posted better-than-expected financial results but provided a cautious outlook for the September quarter. The company’s CEO said on the earnings call that the pace of bookings growth has moderated since the end of the quarter.

Albemarle

(ALB) jumped 5% after the lithium miner smashed second-quarter earnings expectations as well as its own guidance, posting earnings per share of $3.45 on sales of $1.48 billion. Wall Street expected earnings of $3.04 per share on sales of $1.43 billion.

Write to Jack Denton at jack.denton@dowjones.com