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Wall Street Journal features Stephen Pope & Spotlight Ideas

Thursday January 1st 1970


U.S. Stock Futures Higher Ahead of Jobless Claims

U.S. stock market futures moved higher on Thursday in the wake of another big push by Wall Street as investors looked ahead to data that is expected to show weekly jobless claims falling back from the previous week's surprisingly big spike.

About three hours before the start of trading, Dow Jones Industrial Average futures were up 30 points at 14763. S&P 500 futures were up 2.3 points at 1585, and Nasdaq-100 futures inched up 0.25 point at 2853.50. Changes in futures don't always accurately predict early market moves after the opening bell.

Data on weekly jobless claims is due to get more attention than usual when it is released at 8:30 a.m. EDT by the U.S. Labor Department. Last week, claims jumped to a four-month high of 385,000, though economists suspected seasonal disruptions.

Economist polled by The Wall Street Journal forecast claims to fall to 360,000 in the week ended April 6. If claims remain elevated, though, the report would add to growing evidence that the labor market has softened.

At the same time, the government will release the import price index for March, which is expected to fall 0.5% after rising an estimated 1.1% in February.

There are also two Federal Reserve speakers lined up—the Philadelphia Fed's Charles Plosser, speaking from Hong Kong at beginning at 6 a.m. EDT, and James Bullard of the St. Louis Fed due to speak at 8:30 a.m. EDT. Both support reducing the pace of Fed bond purchases.

Minutes of the Federal Reserve's March meeting showed that several Fed officials believe the central bank should taper its bond purchases later in the year and stop it completely by year-end if the labor market improves. The data was released early due to the fact the Fed mistakenly sent those minutes out a day early to Capitol Hill staffers and officials from leading Wall Street firms.

"Much is being made of the leak of Fed minutes, which led to speculation that the Fed could end QE [quantitative easing] this year. That is a notion that is shaped by misinterpretation," said Stephen Pope, managing partner at Spotlight Ideas, in emailed comments.

"What keeps being ignored is that the only voice that matters is that of Ben Bernanke. He is on record that he wants to see unemployment at 6.5% and inflation at 2.5%…We have a way to go yet and that, for me means soft money and accommodation is here to stay," Mr. Pope said, adding that he remains bullish on markets.

Wall Street rose for a third straight day on Wednesday, with both the Dow industrials and the S&P 500 index marking their best sessions in six weeks. The S&P rose to an intraday record of 1589.07 and closed at a record 1587.73, up 19.12 points, or 1.2%.

A smattering of corporate news is expected on Thursday including same-store sales from Costco Wholesale Corp. COST -0.04%and others, while earnings from Pier 1 Imports Inc. PIR +2.14%and Rite Aid Corp. RAD +0.56%are also on tap.

In other markets, European stocks turned higher, in step with U.S. stock futures, while Asia stocks saw a broad rally led by Japan, as markets have been pricing in aggressive easing by the Bank of Japan.

Gold and oil were also marginally lower, while the dollar remained under ¥100.

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