Traders to Watch Jobless Claims for Signs of Recovery
Weekly jobless claims is the big number for markets Thursday, as Greece edges closer to a rescue package.
The weekly unemployment claims data at 8:30 a.m. EST is always important, but it is of special interest this week after the January employment report showed surprising momentum in job creation and a decline in the unemployment rate to 8.3 percent. Wholesale trade data for December is also reported at 10 a.m.
Investors will also be reviewing a fresh batch of earnings news from Pepsico, Credit Suisse, KKR, Dunkin Brands, Noble Energy, Philip Morris and Thomson Reuters, among others. LinkedIn, Petrobras, Lionsgate and Activision Blizzard report after the close.
Wednesday’s after the bell reports could have a lingering impact. Cisco shares temporarily sprang higher in late trading, but were later flat, after the company reported better-than-expected financial results and a dividend hike. Groupon , on the other hand, reported a surprise loss, and its stock slumped 14 percent after the bell. Akamai shot up nearly 13 percent on its earnings news.
“There’s no question what’s going to be hanging over the market is that jobless number,” said Peter Kenny, managing director with Knight Equities.
The other overhang for markets Thursday is the status of Greece’s debt restructuring and fiscal reform though progress appears to have been made. Euro zone finance ministers were to hold a meeting Thursday evening which will be attended by IMF managing director Christine Lagarde, potentially clearing the way for a new round of bailout for Greece.
There is also a European Central Bank rate meeting ahead of the U.S. market open. The ECB is not expected to announce any rate change.
Stocks finished slightly higher Wednesday after reports of a draft agreement of a new financing deal between Greece and the EU and IMF. The Dow was up 5 at at 12,883, and the S&P 500 was up 2 at 1,349.
“You have some areas of real strength reasserting themselves. I’m not talking about IPOs or new companies. We’re talking about the real bellwethers and they’re really driving investor confidence,” said Kenny.
Kenny said the big tech names are helping lead the market. The S&P is up 7 percent since Jan. 1, and is up 22 percent since October. “Microsoft is a classic example. It’s up 27 percent in nine weeks,” he said.
“The rising tide lifts all ships, and it was definitely led by the large cap techs, and Cisco really underscored that. The earnings have validated the price action,” Kenny said. Cisco stock rose about 4 percent in afterhours trading, but later gave up its gains.
However, Steve Massocca, managing director at Wedbush Securities, said the market’s run could be getting tired.
“I think the market has baked in that the Fed will always do what it needs to do. I think the new news that sparked this part of the rally, starting in early December was the ECB,” said Massocca, referring to the ECB’s funding program for banks.
“We sort of reached the end of that play, so we need something new to keep it going here. We need a new theme to push higher, or take the market lower. We’ve kind of stalled here for the last four, five days. I don’t think the existing package of news is going to take us higher,” Massocca said. “We’re going to need something else that’s going to call people to the marketplace. It could be Facebook.”
Facebook last week filed for an IPO.
What Else to Watch
Natural gas storage data will be released at 10:30 a.m. by the EIA.
Treasury auctions $16 billion in 30-year bonds at 1 p.m.
President Obama meets Italian Prime Minister Mario Monti at the White House.
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