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Stock index futures pointed to a rebound at the open Thursday with Disney boosting sentiment.
Nasdaq 100 futures (NDX:IND) +1.2%, S&P futures (SPX) +0.9% and Dow futures (INDU) +0.8% were higher.
Disney (DIS) rallied after solid earnings and announcing 7,000 job cuts as part of its transformation plan under Bob Iger.
On the economic calendar, weekly jobless claims arrive before the bell. The forecast is for a small rise to 190K.
“Another company – Disney this time – has announced headcount reductions,” UBS’s Paul Donovan wrote. “We get US initial jobless claims data today, and the macroeconomic data does not match the high profile press releases of job losses.”
“A major reason is that large companies are not that important economically-smaller businesses matter most to labor markets,” he said. “Smaller businesses tend to have underemployment rather than unemployment. It is quite hard to fire 10% of a three person company.”
“The announcements of job losses may still have an economic impact. Post-pandemic labor market churn has been significant – it is one reason for elevated job vacancy data. Churn pushes up wages and pushes down productivity. If people feel less secure about the labor market, falling churn could depress labor costs even more.”
The 10-year Treasury yield (US10Y) fell 7 basis points to 3.59%. The 2-year yield (US2Y) fell 5 basis points to 4.41%.
There was a “surprisingly strong” 10-year auction yesterday and the Treasury yield “would have been bigger if not for higher inflation breakevens, with the 10yr breakeven up to a 2-month high of 2.356%, whilst the 2yr breakeven hit its highest level in nearly 3 months at 2.629%,” Deutsche Bank’s Jim Reid said. “So that fits into a picture of growing doubt over recent days about whether inflation will remain as calm as previously hoped, particularly given a few indicators like higher used car prices.”
Auction prices for used vehicles jumped by 2.5% in January, which “will be followed by a hefty increase in the CPI measure, in February or March; the lag varies,” Pantheon Macro’s Ian Shepherdson said, adding that “it more likely that the January spike in auction prices is the exception this year rather than the rule.”
Image and article originally from seekingalpha.com. Read the original article here.