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Dow Jones futures rise 116 points as investor optimism returns

We examine what drove US markets overnight as well as where futures markets suggest the DJIA will open on Friday, 25 September.

DJIA Source: Bloomberg

Dow Jones futures rises heading into Friday’s session

US equity markets proved choppy overnight – with the Nasdaq 100, S&P 500 and Dow Jones Industrial Average (DJIA) managing to finish out the session between just 0.20% and 0.37% higher.

‘It was a topsy-turvy not in global markets. US stocks swung from red-to-green all night, as the market picks at itself as it attempts to re-price the outlook for global growth. The question of US stimulus appears the swing-factor for the market at the moment,’ argued IG’s Market Analyst, Kyle Rodda.

On a more granular level, the Dow Jones Industrial Average finished out the session just 52 points or 0.20% higher on Thursday, closing out the session at the 26,815 point mark. Goldman Sachs, Microsoft and Apple were the best performing Dow constituents overnight; while Cisco, NIKE and Boeing were the worst performing.

In explaining this price action, Mr Rodda mused that:

‘Like the romance in some terrible rom-com, then fiscal deal (or at least its news coverage) went from on-again-to-off-gain throughout US trade, with Wall Street stocks eventually managing to eke out a small gain overnight.’

Over the last five sessions the Dow has fallen 3.77% – as equity markets across the board pull back from the highs they recorded at the start of September.

US Jobless claims disappoint

Likely contributing to the uncertain atmosphere across US markets, the U.S. Department of Labor yesterday released a lacklustre set of employment figures, reporting seasonally adjusted initial jobless claims of 870,000, a slight increase from the week prior. The four week moving average for inital claims stands at 878,250.

Commenting on this key release, Mr Rodda said:

‘US jobless claims also disappointed, with initial claims printing above expectations and in-line with the week prior, adding weight to the notion that the US economy’s recovery is stalling.’

Oxford economics researcher, Nancy Vanden Houten, added:

‘The jobless claims data paint a picture of a labor market recovery that’s struggling to maintain momentum.’

In spite of that disappointing economic data, Dow Jones futures traded 0.44% or 116 points higher, at the time of writing, suggesting the key US benchmark would open higher on Friday, 25 September.

S&P 500 and Nasdaq futures were also higher.

Economic data and other events at a glance

Looking forward, in terms of economic data releases, on Friday durable goods orders data and core capital goods orders data is set to be released. Elsewhere, speeches from Chicago's Fed President and New York's Fed President, is also set to take place.

On Monday, next week, Consumer confidence index data – covering September – will be released.

There are no significant earnings releases set to occur in the coming week.

Trade after-market moves with IG

Trading pre- and post-market enables you to take a position on key US shares – like Tesla, Apple, Amazon and Netflix – outside normal trading hours.

To start taking advantage of pre- and post-market trading, create an IG Trading Account.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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