US stock indexes rose on Thursday as investors reacted positively to the latest jobless claims data. Last week, jobless claims dropped by 17,000 to 233,000, marking the biggest fall in claims in almost a year. This news comes after concerns were raised about a potential recession, with JPMorgan analysts raising expectations of a recession by the end of the year to 35%, up from 25%.
The positive jobless claims data provided a boost to the market, with investors gaining greater confidence in the labor market. The decrease in unemployment filings was below estimates of 240,000, indicating a stronger labor market than previously anticipated. Chris Zaccarelli, CIO for Independent Advisor Alliance, noted that while signs of slowing growth are evident, it is hard to believe that a recession has already begun given the current GDP growth rate of +2.8%.
Following the release of the jobless claims data, the 10-year Treasury yield rose, increasing by three basis points to rise above 4%. This increase in yield reflects the positive sentiment in the market following the better-than-expected jobs data.
Investors have been closely monitoring the Federal Reserve’s next move, with expectations of rate cuts in September currently priced in at 100%, according to the CME FedWatch tool. Some economists have even called for emergency rate cuts, but experts believe that the Fed will likely wait until September to make any adjustments.
The next significant data point for investors will be next week’s inflation reading, with the July consumer price index report set to be released on August 14. This report will provide further insights into the state of the economy and could impact market sentiment moving forward.
In commodities, bonds, and crypto markets, oil futures were lower, with WTI crude down slightly to $75.20 a barrel and Brent crude falling 0.1% to $78.18 a barrel. Gold prices rose by 1.23% to $2,412.05 per ounce, while the 10-year Treasury yield increased by three basis points to 4.003%. Bitcoin also saw a slight increase, rising by 0.37% to $57,592.39.
Overall, the positive jobless claims data has provided a much-needed boost to the market, easing concerns about a potential recession. Investors will continue to monitor economic indicators and the Federal Reserve’s actions in the coming weeks to gauge the health of the economy and make informed investment decisions.
