Equity futures as investors see weaker than expected third quarter GDP and lower jobless claims

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Equity futures rose Thursday morning, with the S&P 500 and Dow Jones looking to resume their advance after a hiatus on Wednesday. Traders were eagerly awaiting reports on larger earnings and economic data.

S&P 500 contracts won. The blue chip index fell on Wednesday after posting two consecutive days of highest closing highs. The Dow Jones was also lower, while the Nasdaq ended slightly higher.

Investors are expected to receive more earnings reports from companies such as Apple (AAPL) and Amazon (AMZN) on Thursday, and digested a few key economic impressions, including the first estimate of US gross domestic product (GDP) from the third quarter and weekly unemployment claims. The GDP report showed the economy slowed to develop at the slowest pace in more than a year for the July-September quarter, with the Delta variant and supply-side constraints capping the economic activity. GDP grew at an annualized rate of 2.0%, missing estimates for the 2.6% pace expected by economists.

But even given that weakness and some of the other lukewarm economic data seen in recent times, equity investors have remained resilient and have pushed stocks to record highs.

“The market is right to look through some of the weakness in the third quarter. Much of what we’ve seen recently in terms of data weakness isn’t really a destruction or disappearance of demand, it’s is simply a matter of supply chains that drive demand into the future, ”Simona Mocuta, chief economist at State Street Global Advisors, Yahoo Finance Live said. “There is still a lot of strength ahead of us. There is a lot of money on hold in consumer savings and checking accounts which I think bodes well for 2022.”

One of the main factors driving stocks higher has been the multitude of good company results reported to date. Some of the largest components of the stock index and the largest companies in the United States showed much better than expected sales and revenue growth compared to last year, reflecting strong demand trends in various pockets. economy despite shortages. Shares of mega-cap tech companies Alphabet (GOOGL) and Microsoft (MSFT) each hit record highs on Wednesday after those companies released their results on Tuesday.

With a positive earnings picture now in sight, a lingering question for investors remains how quickly the Federal Reserve will act on monetary policy. While the Federal Reserve has telegraphed that it will most likely begin its process of reducing asset purchases before the end of the year, when the central bank will begin to raise interest rates from near current levels. zero is still pending. . Investors are expected to receive more commentary on this front after the Federal Reserve’s next policy meeting next week.

Many have suggested that these rate hikes will come sooner and faster than members of the Federal Reserve have currently signaled, given the lingering inflationary pressures seen in economic data and heightened in corporate profit calls over the course of the year. the last few weeks. However, the move would increase the cost of borrowing for companies and put pressure on valuations, especially for high growth stocks.

“The big debate now is how fast the Fed is moving towards a real rate hike,” Kathy Jones, Managing Director of Charles Schwab, Yahoo Finance Live said. “Market expectations have really gone up to two rate hikes in 2022 and three in 2023 and beyond. It’s a pretty aggressive tightening pace from where we were just a few months ago. . “

7:21 a.m. ET: Stock futures indicate higher open

Here’s where the markets were trading on Thursday morning:

  • S&P 500 Futures Contracts (ES = F): +15.75 points (+ 0.35%), at 4,560.25

  • Dow Futures (YM = F): +94 points (+ 0.27%), at 35,483.00

  • Nasdaq Futures Contracts (NQ = F): +98.25 points (+ 0.63%) to 15,685.50

  • Raw (CL = F): $ -1.22 (-1.48%) to $ 81.44 per barrel

  • Gold (CG = F): + $ 2.70 (+ 0.15%) to $ 1,801.50 per ounce

  • 10-year cash flow (^ TNX): +1.7 bps for a yield of 1.546%

6:05 p.m. ET: Stock futures open slightly higher

Here’s where the markets were trading at the start of the overnight session on Wednesday night:

  • S&P 500 Futures Contracts (ES = F): +5.5 points (+ 0.12%), at 4,550.00

  • Dow Futures (YM = F): +46 points (+ 0.13%), at 35,435.00

  • Nasdaq Futures Contracts (NQ = F): +14 points (+ 0.09%) to 15,601.25

NEW YORK, NEW YORK – OCTOBER 25: Traders work on the floor of the New York Stock Exchange (NYSE) on October 25, 2021 in New York City. Stocks tended to rise early in the session as investors look to quarterly earnings from tech companies and automakers. (Photo by Spencer Platt / Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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