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After The Dow Closed At A Record Level, US Stock Futures Were Mixed

After The Dow Closed At A Record Level, US Stock Futures Were Mixed

US stock futures mixed on Thursday morning, following Dow’s record close. Dow Jones Industrial Average had set another record high before closing. This has occurred ahead of fresh data on the economic growth, jobless claims, and the manufacturing sector, which will offer fresh insights into the pace of recovery. As per Federal Reserve Chairman Jerome Powell’s comments this week, the central bank will keep interest rates low for a while. Sophie Chardon, cross-asset strategist at Lombard Odier said, “The rise in bond yields triggers this rotation, away from growth stocks and more in favor of value stocks. The rise in yields is supportive for banks, higher oil prices are supportive for energy. It is a change of leadership”. 

After The Dow Closed At A Record Level, US Stock Futures Were Mixed

Contracts tied to the Dow Jones Industrial Average gained 50 points and the move comes after the Dow jumped 425 points on Wednesday to close at a record high in a volatile session that at one point saw the 30-stock average drop more than 110 points. As per reports, S&P 500 advanced 1.1%, the Nasdaq composite gained 1% and the tech-heavy index was down 1.3%. 

After The Dow Closed At A Record Level, US Stock Futures Were Mixed

Ryan Detrick, chief market strategist at LPL Financial said that “Our base case is that rates will continue to rise due to increasing growth and inflation expectations and eventually, Federal Reserve normalization. We also believe if rates move too high too fast, the Fed will intervene to make sure rising rates don’t become too restrictive and disrupt equity markets or the real economy”. 

Economists are expecting a moderate decline for the week

Along with the new durable orders for January, a preliminary estimate for US gross domestic product in the fourth quarter is due out. Economists and experts expect a moderate decline for the week ended February 20 even though the number of applications is likely to remain at historically high levels. An investment strategist at JP Morgan private Bank, Grace Peters said, “People have tried to map a classic recovery cycle to this Covid recovery period. But because it was like a switch was flipped when we all went into lockdown, then it is like a switch is flipped up now. We are seeing the economy recover faster. We are also seeing this in corporate earnings coming in better than expected”. 

Also, Thursday will be a busy day on the earnings front with a number of companies set to release quarterly results. Some of the names reporting are Best Buy, Papa John’s and Domino’s Pizza, Salesforce.com, Beyond Meat, Etsy, and Caesar Entertainment. Ms. Chardon said that the moves show that there is still liquidity and a lot of access to speculative bets.  

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