Stocks staged another huge rally on Thursday as the S&P 500 moved into the green for the year ahead of Friday’s big December jobs report.
First, the scoreboard:
- Dow: 17,898.4 +313.9, (+1.8%)
- S&P 500: 2,061.3, +35, (+1.7%)
- Nasdaq: 4,735, +84, (+1.8%)
And now, the top stories on Thursday:
1. Stocks rallied again. The Dow gained nearly 300 points on Thursday, while the S&P 500 and the Nasdaq gained more than 1.6%, erasing the early losses the indexes suffered to start this year and moving into the green for 2015. As the NYSE’s Rich Barry said in his afternoon email on Thursday: “Make no mistake; this is a very powerful rally we’re seeing today.” Oil prices bounced around but traded around $US48.50 a barrel while long-date Treasury yields backed up some, with the 10-year yield moving back above 2% and the 30-year rising to 2.59%.
2. Ahead of Friday’s jobs report, we got some labour data from the weekly report on initial jobless claims, which fell slightly from last week to 294,000 from 298,000. This was higher than the 290,000 expected by economists, though the four-week moving average of claims did tick lower, and Ian Shepherdson at Pantheon Macro said the trend is claims is consistent with “very big payroll gains.”
3. The December jobs report is set for release on Friday morning, with Wall Street expecting payrolls grew by 240,000 while the unemployment rate ticked lower to 5.7%. Brian Jones at Societe Generale is the most bullish analyst, expecting payrolls grew by 305,000 in December, while David Mericle at Goldman Sachs takes a more measured approach, looking for a 230,000 print.
4. The decline in oil prices has been the biggest story in markets, and as prices remain at multi-year lows, the impacts will begin to make their way into the broader economy. The most prominent area where this impact is expected to show up is inflation, and in a note on Thursday, BNP Paribas economist Laura Rosner said that headline inflation, which includes food and gas, will likely be negative in the first half of 2015. Excluding food and gas, however, inflation is expected to run at around 1.7%-1.8%.
5. Deutsche Bank economist Torsten Slok circulated a new housing slide deck on Thursday, and a series of slides highlighted by Business Insider’s Andy Kiersz shows that Canada’s housing market and financial system could be facing some tough times ahead.
6. In stock news, one of the big stories on Thursday was news that activist hedge fund Starboard Value sent a letter to Yahoo CEO Marissa Mayer warning that were Mayer to pursue a large acquisition, it “would be a clear indication to us that significant leadership change is required at Yahoo.” Yahoo shares gained almost 3% on Thursday.
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