Benzinga - by Shanthi Rexaline, Benzinga Editor.
After the Federal Reserve‘s decision, the stock market rally is poised to gain momentum on Thursday, with stock futures indicating an uptick. Positive earnings reports may bolster this rally, and the decline in bond yields, driven by rising rate-cut expectations, could be viewed favorably by investors. Additionally, traders will be monitoring job market data ahead of Friday’s crucial non-farm payrolls report for September. Apple, Inc.‘s (NASDAQ:AAPL) fourth-quarter earnings report is expected to be the day’s focal point, although it won’t be released until after the market closes.
Cues From Wednesday’s Trading:
On Wednesday, U.S. stocks made solid gains following the Fed’s anticipated decision to pause. Chair Jerome Powell‘s post-meeting press conference comments, highlighting progress in managing inflation and inflation expectations, provided encouragement to traders.
At the market open, there was divergence among major averages, with the Nasdaq Composite and S&P 500 opening higher, while the Dow Industrials began lower. As the morning progressed, all averages moved higher, consolidating their gains. Powell’s remarks on inflation bolstered buying interest, leading to further advances before the closing bell.
The Nasdaq Composite surpassed the 13,000-point mark, enjoying a four-day winning streak, while the S&P 500 and Dow Industrials extended their gains for a third consecutive day.
Small-cap stocks experienced volatility, spending most of the session trading below the break-even point before recovering in late trading.
US Index Performance On Wednesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.64% | 13,061.47 |
| S&P 500 Index | +1.05% | 4,237.86 |
| Dow Industrials | +0.67% | 33,274.58 |
| Russell 2000 | +0.45% | 1,669.70 |
Analyst Color
Morgan Stanley’s Lisa Shalett differs from some analysts and investors in that the equity-market rally seen between October 2022 and July 2023 marks a new bull market. “We see it as a mere retracement or Phase II, of a continuing bear market,” she said.“And today, we believe we are seeing Phase III, a period of potential volatility for both stock valuations and corporate profitability, in which stock indices remain rangebound,” the analyst said. Short-term traders should find tactical opportunities, but long-term investors should stay patient and maintain a strategic outlook, she added.
Futures Today
Futures Performance On Thursday| Futures | Performance (+/-) |
| Nasdaq 100 | +0.77% |
| S&P 500 | +0.47% |
| Dow | +0.38% |
| R2K | +0.84% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.50% to $424.77 and the Invesco QQQ ETF (NASDAQ:QQQ) jumped 0.86% to $360.03, according to Benzinga Pro data.
Upcoming Economic Data
Challenger, Gray & Christmas’ report on job cuts for October is due at 7:30 a.m. EDT.The Labor Department is scheduled to release the weekly jobless claims report at 8:30 a.m. EDT. Economists, on average, expect the number of individuals claiming unemployment benefits to come in at 210,000 in the week ended Oct. 27.
The Labor Department will release its preliminary third-quarter productivity and costs report at 8:30 a.m. EDT. The consensus estimates call for an annualized rate of quarter-over-quarter increase of 4.1%, faster than the 3.5% increase in the second quarter. The unit labor cost growth may have decelerated from 2.2% to 0.7%.
The Commerce Department is scheduled to release the factory goods orders report for September at 10 a.m. EDT. Economists expect factory goods orders growth of 2.4% month-over-month following a 1.2% increase in August.
See also: How To Trade Futures
Stocks In Focus
- Roku, Inc. (NASDAQ:ROKU) rallied nearly 19% in premarket trading following the release of its quarterly results.
- Among the other stocks moving on earning are Fastly, Inc. (NYSE:FSLY) (up about 16.5%), Etsy, Inc. (NASDAQ:ETSY) (down over 5%), The Clorox Company (NYSE:CLX) (up over 10%), Lemonade, Inc. (NYSE:LMND) (up about 17%), PayPal Holdings, Inc. (NASDAQ:PYPL)( up about 7%), Qualcomm, Inc. (NASDAQ:QCOM) (up about 7%), Starbucks Corporation (NASDAQ:SBUX) (up over 6%) and Tandem Diabetes Care, Inc. (NYSE:TNDM) (down over 18%).
- Bausch Health Companies Inc. (NYSE:BHC), ConocoPhillips (NYSE:COP), Crocs, Inc. (NASDAQ:CROX), Eli Lilly and Company (NYSE:LLY), Ferrari N.V. (NYSE:RACE), Fox Corporation (NASDAQ:FOXA), Hyatt Hotels Corporation (NYSE:H), Marriott International, Inc. (NASDAQ:MAR), Moderna, Inc. (NASDAQ:MRNA), The Wendy’s Company (NASDAQ:WEN), Paramount Global (NASDAQ:PARA), Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), The Cigna Group (NYSE:CI), and Peloton Interactive, Inc. (NASDAQ:PTON) are among the notable companies reporting their quarterly results before the market open.
- Those reporting after the close include Apple, Block, Inc. (NYSE:SQ), DraftKings Inc. (NASDAQ:DKNG), Dropbox, Inc. (NASDAQ:DBX), Expedia Group, Inc. (NASDAQ:EXPE), Fortinet, Inc. (NASDAQ:FTNT), Live Nation Entertainment, Inc. (NYSE:LYV), Palantir Technologies Inc. (NYSE:PLTR) and Skyworks Solutions, Inc. (NASDAQ:SWKS).
Commodities, Bonds, Other Global Equity Markets
Crude oil futures rose 1.32% to $81.50 in early European session on Thursday following a 0.72% retreat in the previous session.The benchmark 10-year Treasury note rose 0.073 percentage points to 4.718% on Thursday.
The most Asian markets advanced on Thursday, encouraged by Wednesday’s Fed announcement, although the Chinese market bucked the uptrend.
European stocks also advanced strongly in late-morning trading on Thursday ahead of the Bank of England’s rate decision due at 8 a.m. EDT. The Monetary Policy Committee is widely expected to leave the key rate unchanged at 5.25%.
Cryptocurrencies have also gained ground post the Fed decision. Bitcoin (CRYPTO: BTC) has gained over 3% over the past 24 hours and traded up 0.20% at $35,442.37.
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