US futures rise after jobless claims hit a new pandemic low, while bitcoin slides back below $40,000

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Stocks inched higher on Wall Street after strong economic data. Angela Weiss/Getty Images

US futures rose on Friday after strong economic data showed that the jobs market continues to heal from the fallout of the pandemic, and as investors awaited more details about President Joe Biden’s $6 trillion budget.

Asian stocks moved broadly higher overnight and European stocks rose in early trading. Bond yields and the dollar also edged higher. But bitcoin languished below the $40,000 mark, more than 40% off its all-time high.

S&P 500 futures climbed 0.35%, after the underlying stock index rose 0.12% on Thursday. The S&P 500 was on track to eke out a small gain in May, its fourth consecutive monthly rise.

Nasdaq 100 futures rose 0.22% despite the tech-heavy index slipping the previous day. Dow Jones futures rose 0.56%, with the industrially focused index benefitting from a rotation into stocks that stand to do better as the economy recovers.

US equities climbed after data showed new weekly jobless claims sank to a COVID-era low of 406,000 in the week that ended May 15.

Separate data showed that orders for industrial equipment rose in April at the fastest pace in eight months, and confirmed that US gross domestic product grew at the rapid rate of 6.4% in the first quarter.

A much steeper-than-expected rise in capital goods orders and the decline in jobless claims “pointed to a US economy in good shape in Q2,” Chris Scicluna of Daiwa Capital Markets said.

Yet Scicluna said investors remained nervous about inflation, limiting gains in stock markets.

Data out Friday will show how much the core personal expenditures index – the Federal Reserve’s preferred measure of inflation – rose in April.

Investors worry that a surge in inflation will erode the value of their portfolios. And they are concerned it could force the Fed to cut back on support for the economy sooner than expected – although the central bank has pushed back on this idea.

President Joe Biden is also set to unveil a $6 trillion White House budget that will include large amounts of spending on infrastructure.

Lori Calvasina, head of US equity strategy at RBC Capital Markets, said her firm is optimistic about the outlook for stocks.

“Slipping sentiment and peaking economic and earnings indicators may contribute to a brief pullback at some point during the second half, but the longer-term economic outlook remains constructive for stocks,” she wrote in a note.

US bond yields inched higher ahead of the inflation data, with the yield on the key 10-year US Treasury note edging up 0.2 basis points to 1.610%. The dollar index edged 0.03% higher to 90.

Bitcoin continued to struggle, slipping back below $40,000 to around $36,620 after a brief rally faltered. The world’s most-traded cryptocurrency was 43% below its all-time high of close to $65,000 reached in April.

“We are currently experiencing a calm after the proverbial storm,” Justin d’Anethan, head of exchange sales at digital currency firm EQUOS, said. “Last week saw the market move with brutal volatility, forcing massive liquidations across derivatives exchanges and, therefore, massive losses for a good chunk of the investor base.”

Oil prices inched higher following the strong economic data, with Brent crude up 0.19% to $69.34 a barrel and WTI crude 0.31% higher at $67.08 a barrel.