U.S. stock indexes set to pause after records as investors assess jobless claims, GDP revision

U.S. stock indexes set to pause after records as investors assess jobless claims, GDP revision

U.S. stock indexes were set to open flat to lower on Thursday as investors waited for data on second quarter economic growth and on weekly jobless benefit claims.

Stocks were largely steady in pre-market trade after closing further in record territory Wednesday, with the S&P 500 index notching its 51st record high of 2021, matching the highest number of new highs at this point in the year since 1995, according to Dow Jones Market data.

How stock benchmarks are trading

On Wednesday, the Dow
DJIA,
+0.11%

rose 39.24 points, or 0.1%, to end at 35,405.50, supported by gains in financials, and rising to withing 1% of its Aug. 16 record high; the S&P 500 index
SPX,
+0.22%

closed at a record 4,496.19, and the Nasdaq Composite Index
COMP,
+0.15%

climbed 22.06 points, or 0.2%, closing at a record 15,041.86.

What’s driving the market?

U.S. stocks looked vulnerable to a pullback after the major equity indexes have climbed for at least four consecutive days, registering a series of notable records.

On Thursday, investors may turn to economic reports to help to justify benchmarks tallying further gains in the era of COVID-19.

A second estimate of U.S. gross domestic product, the official scorecard of U.S. economic expansion, is slated to be released at 8:30 a.m. Eastern Time, with economists surveyed by Dow Jones forecasting on average an annual growth rate of 6.7%, versus an initial reading of 6.5%.

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Economists also are forecasting that the latest report on weekly jobless benefit claims for the period ended Aug. 21 will show 350,000 claims, slightly up from last week’s reading of 348,000. Applications for unemployment benefits reached a new pandemic low in the second week of August, signaling an improving labor market.

The data come ahead of a speech from Fed Chairman Jerome Powell at a Jackson Hole symposium of global central bankers that is being held virtually and could provide some guideposts for the timing and pace of the Fed’s plans to scale back on crisis-era policy accommodations. However, expectations that Powell will use the venue as an opportunity to broach the subject of tapering have diminished since last week amid the spread of the highly transmissible delta variant of COVID-19.

The spread of the contagion has led Bank of America to lower its year-end forecast on the 10-year Treasury note TMUBMUSD10Y to 1.55%.

“We came into 2021 with a 10Y year-end target of 1.5% but subsequently revised higher to eventually above 2% after the Democratic clean sweep, vaccine progress and sharp upward revision of economic expectations from our US economists. We now return nearly full circle,” wrote analysts led by Mark Cabana.

“We are forced to acknowledge that the delta variant has caused a considerable reassessment of the economic outlook as priced in by rates markets globally,” he wrote.

Federal regulators are likely to approve a COVID-19 booster shot for vaccinated adults starting at least six months after the previous dose rather than the eight-month gap they previously announced, a person familiar with the plans said, as the Biden administration steps up preparations for delivering boosters to the public, the Wall Street Journal reported.

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Which companies are in focus?
  • Lululemon Athletica Inc. LULU, +0.62% said Thursday that it will raise the minimum base pay for most of its North America employees to $15 or $17 per hour, depending on their role in the market.

  • Shares of XPeng Inc. XPEV fell 1.2% in premarket trading Thursday, after the China-based electric vehicle maker reported a wider-than-expected second-quarter loss but revenue that rose more than sixfold to top forecasts.

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