US stock markets opened higher on Thursday, recovering some of Wednesday’s losses on the back of some encouraging economic data shortly before the bell.
We were seeing sentiment improving ahead of the open and we’re off to a decent start. Don’t get me wrong, this is still a fragile environment and we could see another wobble, even before the day is out, but it’s encouraging to see a positive start to the session.
The drop in jobless claims was better than the forecasts, dropping to 847 thousand, a three-week low. This may be driving a little optimism that the first quarter won’t be as bad as feared, given the intense restrictions. I think it’s a little early on that front but right now, small wins are useful.
GDP misses estimate
GDP data for the final quarter was also a little weaker than expected but in a way, that’s already old news. The first-estimate report showed that the economy gained 4.0%, after the huge double-digit GDP reports we saw in the previous two quarters. This missed the forecast of 4.2%.
Covid vaccines are now being rolled out and more restrictions are in place in the near-term. The start of the year may be tougher than many expected but a strong rebound going into H2 should be cause for optimism.
The uplift also occurred around the same time that reports started emerging of possible restrictions on certain stocks on popular trading app Robinhood. Gamestop, AMC, Blackberry and others are making big losses today following the decision by the app. Although compared to what we’ve seen in recent days, it’s still relatively small.
Whether this has contributed to the rebound in stock markets around the US open isn’t clear but it will be interesting to see if other restrictions follow. We’ve seen the power of social media over the last week; the response will be very interesting indeed.
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/