Softer jobless claims push US stocks higher

US markets rallied on Thursday following a rise in jobless claims that rekindled investor hopes that the Fed will cut rates in the second half of this year.

The Dow rallied 0.85 per cent to make it the seventh positive close in a row for the 30 stock index. The S&P 500 finished 0.51 per cent higher, while the Nasdaq closed 0.27 per cent higher.

Unemployment claims for the week ending May 4 rose by 22,000 to 231,000, up from 209,000 the week before, the Labor Department reported. In addition to the unemployment data, a bond auction met with strong demand helped drive yields lower on Thursday. The 10-year Treasury was last down 3 basis points to about 4.45 per cent while the 2-year Treasury yield dipped 3 basis points to roughly 4.81 per cent.

In company news, Home Depot and Caterpillar led the Dow higher as both stocks added 2 per cent each. Warner Bros Discovery added 3 per cent, despite reporting softer than expected headline numbers. Semiconductor company Arm lost more than 2 per cent after giving weaker revenue guidance. Airbnb pulled back more than 6 per cent after also lowering guidance.

Apple closed 1 per cent higher after Bloomberg reported that the company will deliver some of its upcoming artificial intelligence features this year via data centres equipped with its own in-house processors, part of a sweeping effort to infuse its devices with AI capabilities.

Turning to commodities, Johnson Matthey predicts that the platinum market will experience a significant deficit of 598,000 ounces in 2024, the largest in the past decade, following a shortfall of 518,000 ounces in 2023, with primary supply projected to decline by 2 per cent due to normalised Russian shipments. Additionally, all platinum group metals are anticipated to remain in deficit this year, with palladium expected to be short by 358,000 ounces and rhodium by 65,000 ounces.

Traders are betting heavily on a surge in European gas prices, reaching levels not seen in over two years, amid concerns over potential supply disruptions. Investment funds' net long positions in futures contracts tied to Europe’s main gas benchmark have soared to 96.4 terawatt hours, valued at approximately €3 billion, the highest bullish stance since February 2022, coinciding with Russia's invasion of Ukraine and subsequent cuts to gas supplies, which drove prices up.

Turning to US sectors, the best performer was Real Estate which closed 2.31 per cent higher. The worst performing sector was Tech which finished down 0.25 per cent.

In European news the Bank of England announced it would hold interest rates steady as expected, however, in later commentary it was clear that more policymakers voted in favour of a rate cut than at the BOE’s previous meeting.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Currency

One Australian dollar at 7.45am was buying 66.19 US cents.

Commodities

Gold has gained 0.78 per cent. Silver has jumped 2.77 per cent. Copper has added 0.94 per cent. Oil was up 0.34 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.33 per cent, Frankfurt gained 1.02 per cent, and Paris closed 0.69 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei lost 0.34 per cent, Hong Kong’s Hang Seng added 1.22 per cent while China’s Shanghai Composite closed 0.83 per cent higher.

The Australian share market closed 1.06 per cent lower at 7,721.64..

Ex-dividends
Embark Early Education (ASX:EVO) is paying 1.5 cents fully franked

Dividends payable
Namoi Cotton Ltd (ASX:NAM)
Washington H Soul Pattinson & Co Ltd (ASX:SOL)
Waypoint REIT Ltd (ASX:WPR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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