Thursday October 1st


Wall Street starts new quarter

U.S. stock index futures indicated a higher open on Thursday, trying for a positive start to the last quarter of the year after the worst one in four years. Wednesday saw a nearly 2 percent rally, and while most Wall Street strategists believe the stock market will bounce back in the fourth quarter, the potential for headwinds is high. Topping the list of worries is China, which clearly has a slowing economy, although it is unclear how slow. The market also faces a potentially rocky earnings season, with profits expected to shrink about 3 percent, and traders wondering whether there will be a China chilling effect on corporate outlooks, either directly or indirectly. The other big factor hanging over markets continues to be the Fed, which could potentially raise interest rates for the first time in nine years at one of two meetings — October 28 or December 16. The fourth quarter is usually a positive time for stocks, so if the market does not rally as some analysts suspect, the debate will turn to whether 2016 will bring the first bear market in seven years. On the data front, initial jobless claims showed a slight increase to 277,000. Construction spending and ISM manufacturing data are due at 10:00 a.m ET. Data for light vehicle sales will also be released Thursday. The number of announced layoffs by U.S.-based companies surged 43 percent in September from the previous month, driven by job cuts at Hewlett-Packard, global outplacement firm Challenger, Gray & Christmas reported Thursday. In Europe, the pan-European Stoxx 600 index was around 0.4 percent higher on Thursday, boosted by rallies in Asia and Wall Street overnight. No significant earnings are expected today. Asian equities kicked off the fourth quarter on a positive note on Thursday, as an overnight rally on Wall Street spurred risk appetite amid the release of key economic data from Asia's top two economies. Chinese markets will not have an immediate chance to react to the data barrage as they are closed for the week-long National Day holiday starting from today. Nikkei bounces 1.9%. Japan's Nikkei 225 index continued its up-climb after leaping 2.7 percent in the previous session, but came off slightly from the day's highs in the final minutes of trading. Oil rose to about $49 a barrel on Thursday as an emerging risk premium over the situation in Syria countered further signs of an economic slowdown in Asia and rising U.S. inventories. U.S. West Texas Intermediate (WTI) futures were at $45.76 a barrel at 8:25 a.m. EDT (1225 GMT), up 67 cents from their last settlement. Brent crude futures were at $48.83 per barrel, up 46 cents. Gold fell to two-week lows on Thursday following its biggest quarterly loss in a year, after upbeat U.S. jobs data boosted speculation that the Federal Reserve could press ahead with an interest rate hike this year. Traders are awaiting U.S. non-farm payrolls data on Friday before placing big bets, but expectations for a strong reading rose after payrolls processor ADP said on Wednesday that U.S. private employers added a stronger-than-expected 200,000 jobs in September. Spot gold was down 0.01 percent at $1,114.51 an ounce, after earlier dropping to $1,110.75, its lowest since Sept. 16. U.S. gold futures for December delivery were down $1.30 an ounce at $1,113.90.