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Wall Street opens in the green as markets shrug off jobless data

The main indices on Wall Street started Thursday’s session on the front foot as traders seemed to shrug off worse than expected jobless data to instead focus on incoming spending plans from president-elect Joe Biden. In the first minutes of trading, the Dow Jones Industrial Average was up 0.24% at 31,136 while the S&P 500 climbed 0.15% to 3,815 and the Nasdaq rose 0.39% to 13,180. Investors appear to be holding out hope that Biden’s spending plans, which are expected to amount to as much as US$2 trillion, will be enough to pull the US out of its economic slump and reverse what appears to be an ever-worsening unemployment crisis. This was thrown into sharp relief this morning as the latest US jobless claims data showed that for the week to January 9 rose to 965,000 from 784,000 the week before, well above the consensus forecast of 788,500 while continuing claims for unemployment benefits for the week before shot up to 5.3mln from 5.1mln. There may also be hopes that Biden will take more drastic measures to get the pandemic under control and coordinate vaccination efforts more effectively, a strategy that is ultimately more likely to rejuvenate the economy than any amount of government spending. “There will be no real improvement in the jobs market until Covid containment measures are relaxed and businesses have the confidence to hire”, said analysts at ING. However, the Dutch bank added that it could be “many months” before the US will be able to reach some semblance of herd immunity, which may require up to 90% of the population being vaccinated. 7:56am: Wall Street to head mostly higher After reports that president-elect Joe Biden will propose a US$2,000bn stimulus package when he takes office, US stocks are expected to open mostly higher. Spread betting quotes suggest that the Dow Jones Industrial Average, which dipped a little yesterday, will open 92 points firmer at 31,152. The S&P 500 is expected to open 7 points to the good at 3,817 but the Nasdaq Composite’s meteoric rise in 2020 is starting to seem like a distant memory as it is tipped to shed 152 points at 12,977. According to news channel CNN, Biden will outline in a speech today a scheme that will include more direct payments to US families plus substantial state and local funding. Meanwhile, “Impeachment: the sequel” goes on but markets don’t seem overly fussed with the prospect of President Trump facing trial. “The Democrats are getting their wish and the House of Representatives has passed another motion of impeachment against President Trump, following two more in December 2019 but US stock markets seem to be taking the news in their stride for three reasons,” said AJ Bell’s investment director, Russ Mould. “First, it is unclear whether the Senate will deliver the two-thirds majority required to remove Mr Trump from office, as nearly a third of the Republican in the Upper House will need to support the motion. Second, President-Elect Biden will be inaugurated on Wednesday 20 January to end Trump’s sole term in office anyway. Finally, the three previous impeachment episodes of modern times had relatively little impact upon markets, which were influenced far more strongly by the prevailing economic backdrop and the outlook for corporate earnings and dividends. Ultimately, share prices care more about profit than politics,” Mould said. On the data front in the US, traders will try hard (and fail) to get enthused about the import price index for December and the weekly jobless claims report. Initial jobless claims in the week to January 9 are expected to edge up to 788,500 from 787,000 the week before. Continuing claims in the week to January 2 are tipped to come in around the 5mln level, down from 5,07mln the preceding week. Three things to watch for on Thursday: The earnings diary is starting to gain a little momentum with investment manager BlackRock Inc (NYSE:BLK) scheduled to deliver fourth quarter earnings Also in the diary is major US carrier Delta Air Lines Inc (NYSE:DAL), which will also be reporting its fourth quarter numbers Shares in Virgin Galactic Holdings Inc (NYSE:SPCE) may also be in focus after investment manager ARK filed documents with the SEC to launch a space exploration ETF, which could see the firm added as a constituent

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