Before the Bell: The nation's economy, lifted in recent days by stronger-than-expected issuances on job growth, manufacturing activity, and the non-manufacturing sector, has just received unimposing data on jobless filings for the latest seven-day period. Specifically, the Labor Department this morning released figures showing that in the most recent week, new layoffs came to 744,000. That was up from 728,000 the week before and also was above forecasts of 680,000 claims. Large increases in layoffs in New York and California led the way, as those states have seen some return to lockdowns as COVID-19 cases have risen there.
The stock market, which has had a good run recently, held its pre-market strength in the futures following this report, and seems set up to begin the new session with additional gains, led by the tech-heavy NASDAQ, indicated to open perhaps 100 or more points higher. The recent stability in Treasury yields is helping here. Looking ahead, Wall Street will also have to deal with the release of the Producer Price Index tomorrow morning. That metric will be looked at closely, as an earlier issuance, which showed a sharp jump in such prices, had contributed to some inflation concerns and a run-up in Treasury note and bond yields.
Meanwhile, in other news that may have an impact on the stock market in the days to come, President Biden said yesterday that he might be open to raising the corporate tax rate to less than 28%, but that some material hike in such rates will be necessary to pay for his proposed $2.3 trillion infrastructure plan. Finally on the news front, the Federal Reserve unveiled the minutes from its March monetary policy meeting. However, the report broke no new ground, with the Fed again affirming that it remains committed to an accommodative monetary approach.
As to yesterday's market, Wall Street followed up Monday's strong report and Tuesday's indecisive performance with more uneven action, as the Dow Jones Industrial Average would add just 16 points, while the NASDAQ would ease by 10 points. Neither composite deviated very far from the breakeven line throughout the session. Overall, the key indexes, especially the Dow and the S&P 500 continue to knock on the door of additional records.
Breaking the stock market session down, five of the 11 key market sectors rose on this closely divided day, led by communications services and technology, while the other six categories gave ground. None of the moves in either direction were significant, save for a sharp drop in the materials group. As to individual names, several growth issues faltered, including shares of Tesla (TSLA) and Zoom Video Communications (ZM), while the more seasoned growth issue Apple (AAPL) gained on the day. – Harvey S. Katz, CFA