Stocks rose early Thursday as investors braced for a crucial bank earnings season and digested the latest data on Initial Jobless Claims which showed a rise in unemployment insurance filings.
Shortly after Thursday’s opening bell, the S&P 500 (^GSPC) was up 0.3%, up. The Dow Jones Industrial Average (^DJI) was nearly flat, while the Nasdaq-heavy Composite (^IXIC) was up 0.8%.
Labor market data released Thursday morning indicated that the labor market continues to ease with initial filings for unemployment insurance totaling 239,000 for the week ending April 8, the highest level since January 2022, According to the latest government data.
Oren Klashkin, chief US economist at Oxford Economics, wrote in a note to clients on Thursday. “The next slowdown in the labor market will be modest because the decline in demand will be fairly modest and employment will remain relatively small.”
On the earnings side, investors are bracing for a bank earnings rally on Friday morning with JPMorgan (JPM), Citi (C), and Wells Fargo (WFC) each expected to report results.
Delta Air Lines (DAL) quarterly results were a highlight for the company early Thursday, as those results showed that the company missed Wall Street expectations both top and bottom. Delta shares fell less than 1% in early trade.
Ed Bastian, CEO of Delta, told Yahoo Finance Thursday that “given all the uncertainty and some of the volatility we’re seeing and the seasonality of our weaker quarter, we were very pleased and thought it was a really strong performance.”
Stocks fell on Wednesday after minutes from the Federal Reserve’s latest policy meeting showed that some officials expected the economy to enter a recession later in 2023.
For some time, the task force’s projections for the US economy showed weak real GDP growth for this year and some downturn in the labor market. Read the minutes.
“Given their assessment of the potential economic impacts of recent developments in the banking sector, staff expectations at the time of the March meeting included a mild recession starting later this year, with a recovery over the following two years.”
The minutes eventually revealed, however, that the Fed official was largely convinced the banking system would remain stable after several bank failures last month, and would likely keep the central bank on track to raise interest rates again next month.
“The March FOMC meeting minutes show that two weeks after the SVB fiasco, policymakers were more concerned about the risks of bullish inflation than the risks of a more sharp slowdown in activity than they had previously anticipated,” wrote Ian Shepherdson, chief economist at Pantheon. macroeconomics, in a note to clients on Wednesday.
“We suspect this situation will survive with the data coming in over the next two months.”
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