Thursday May 31st

31-05-2018

US stocks set to open slightly higher after Wednesday's strong rally

U.S. stock index futures traded slightly higher ahead of Thursday's open, following a sharp rally seen in the previous session. As of 8:07 a.m. ET, Dow Jones industrial average futures rose 1 point, indicating a gain of 8.22 points at the open. Nasdaq 100 and the S&P 500 futures also indicated a slightly positive start to the session for their respective markets. Stocks rose sharply on Wednesday as concerns surrounding Italy's political crisis showed signs of abating. The Dow gained more than 300 points while the small-caps Russell 2000 index notched a record high. Banks led the rally on Wednesday, as companies like Goldman Sachs and Bank of America both gained more than 1 percent. In Asia, stocks finished the session in the black. Investor sentiment seen in Asia spilled over into European trade, where markets were trading mostly higher. In the previous session, U.S. stocks closed up sharply higher, with the Dow Jones industrial average finishing up more than 300 points. Japan's Nikkei 225 added 183.30 points, or 0.83 percent, to 22,201.82 while the Topix index gained 11.32 points, or 0.65 percent, to 1,747.45. In South Korea, the Kospi added 13.98 points, or 0.58 percent, to 2,423.01. News of a meeting between U.S. Secretary of State Mike Pompeo and North Korean official Kim Yong Chol saw some North Korea-exposed stocks rise, with Hyundai Cement up 5.11 percent. Elsewhere, Hong Kong's Hang Seng Index closed up 411.77 points, or 1.37 percent, at 30,468.56. On the mainland, the Shanghai composite gained 56.49 points, or 1.86 percent, to 3,097.93, following the release of better-than expected official manufacturing PMI data. In recent days, markets around the globe have been on edge over concerns surrounding the euro zone's third-largest economy, Italy. Investors have been fretting over the possibility of snap elections, and whether the country's involvement in the European Union and the euro currency will be called into question. News surrounding fresh efforts to form a government have helped alleviate fears over the past day. Switching focus, Thursday is set to be a prominent day for economic data. U.S. jobless claims fell at the end of May, suggesting that a recent increase in the rate of layoffs stemmed mostly from seasonal quirks whose effects are already fading. Initial jobless claims declined by 13,000 to 221,000 in the week ended May 26. Economists polled by MarketWatch had forecast a 225,000 reading. The more stable monthly average of claims, meanwhile, rose by 2,500 to 222,250. The number of people already collecting unemployment benefits dropped by 16,000 to 1.73 million, the government said Thursday. These are known as continuing claims, followed by a Chicago purchasing managers' index (PMI) at 9:45 a.m. ET, and pending home sales at 10 a.m. ET. Elsewhere, investors will keeping an eye out for news surrounding North Korea, as U.S. Secretary of State Mike Pompeo and top North Korean official Kim Yong Chol continue to hold talks in New York. Oil prices dropped on Thursday, weighed down by a surprise rise in U.S. crude inventories and by expectations that OPEC and other producers could increase output at a meeting in June. Brent crude was down 20 cents at $77.30 per barrel at 0041 GMT, after settling the last session up 2.8 percent. U.S. West Texas Intermediate crude was down 20 cents at $68.01 a barrel. In the previous session, it settled up $1.48, or 2.2 percent, at $68.21 per barrel. U.S. crude inventories rose by 1 million barrels in the week to May 25 to 434.9 million barrels, according to data from industry group the American Petroleum Institute, although analysts had expected a decrease of 525,000 barrels. Gold prices were stable on Thursday as a dollar rally came off the boil, though upside momentum in the precious metal, seen as a safe haven asset, was capped by an easing of political tensions in Italy. Spot gold was flat at $1,301.29 per ounce by 8:40 a.m. ET, but was down 0.7 percent for the month, in what could be its second straight monthly decline. U.S. gold futures for August delivery were flat at $1,305.70 per ounce.