It’s a long way to the close in New York yet, but at the time of writing (early afternoon in New York), the Dow is on track to break a three-day streak of losses, up 0.29% or 45 points at 15,515. The blue chip index was a lot higher shortly after the open, though, but still managed to slip into the red for most of the morning, before recovering around midday on Wall Street. In other words, it’s been a volatile day, and it wouldn’t be hugely surprising to see another twist in the tail or two before the US markets shut.
Stocks have been giving a lift by positive economic news out of China: Chinese exports and imports both surged in July after declines in June, raising hopes that China’s economy is pulling out of its slowdown, which should provide a crutch to other recovering economies around the globe.
One of the big issues undermining sentiment at the moment is the issue of when the Fed will begin tapering. Decent US jobless claims data this morning would appear to slightly feed into those worries, although clearly this is a double-edged sword. Although a stronger jobs market increases the likelihood of tapering coming earlier, it is a boost to the economy.
Jobless claims came in at 333,000 for last week, broadly in line with estimates. This is a slight rise from the week before, but the July data was so clouded by seasonal adjustments (car manufacturers shut down their factories in July for retooling, but without a fixed schedule from year to year) that we can’t read too much into that. The four-week moving average, however, has dropped to a new post-recession low, which signposts a trend of improvement in the jobs market.
That’s likely to provide ammunition to hawks at the Fed, and in the short term that might lead to a fair bit of chop in the stock market, but long term it cannot be a bad thing for stock prices to have employment improving.
Although we are near the end of the reporting season, quarterly earnings continue to provide the impetus for big moves here and there. Groupon has today spiked up a remarkable 26% after reporting a 7.2% growth in revenue and the permanent appointment as CEO of co-founder Erik Lefkofsky.