US futures hold gains on jobs data despite GDP report
S&P 500 Index futures are up 0.4 percent and almost unchanged from the levels before the release of the third 3Q US GDP report and initial jobless claims. The GDP report revised down growth in the third quarter to 1.8 per cent QoQ annualised compared to the 2.0 and 2.5 percent reported in the second and first reports respectively; the main driver was lower than estimated personal consumption.
Initial jobless claims were again strong for the second consecutive week with 364K claims compared to 380K expected and last week’s figures were revised up 2K. The figures add further strength to the downward trend in the 12-week rolling figure signalling an improving US labour market. The recent strength in initial jobless claims could very well begin to filter through to more consumer spending unless confidence weakens on more negative news out of Europe.
Also continuing claims are improving rapidly with 3546K claims, compared to 3600K expected, dropping to levels not seen since around the first quarter of 2008.
Later at 15:00 GMT US leading indicators will hit the markets and the Street is looking for a 0.3 percent MoM change.
European stocks up 1.3% on lower volume
With the recent string of positive US economic data and IFO figures out of Germany this week investors are slightly more confident sending stocks up 1.3 percent in Europe with Financials as the best performers.
Peter Garnry
SAXO BANK