By Geoffrey Smith
Investing.com -- The U.S. releases jobless claims data, a day after posting a new record high for Covid-19 infections. A wary stock market is set to open mixed. Joe Biden makes a keynote speech on economic policy while Donald Trump awaits a Supreme Court ruling on his tax returns. Metals surge - and not just gold - as price data out of China foster hopes about its economic rebound and drive local stocks to a new record. Here's what you need to know in financial markets on Thursday, July 9th.
1. Jobless claims due
The U.S. will release its latest data for initial and continuing jobless claims at 8:30 AM ET (1230 GMT), to a market increasingly concerned about the risk of a fresh downturn due to the pandemic.
Continuing claims had actually ticked up in last week’s figures but are expected to fall by over 300,000 to 18.95 million, while initial claims – which have repeatedly overshot analysts’ expectations in recent weeks – are expected to slow by another 52,000 to 1.375 million.
The release comes as the U.S. reported a new record of over 62,000 fresh cases on Wednesday, nearly 10% above the previous daily record. The Covid Tracking Project recorded over 900 deaths from the disease for the second day running. Johns Hopkins now puts the U.S. death toll at over 132,000, just under a quarter of the global total.
2. Yuan regains 6-handle as deflation fears ease
The Chinese yuan broke through the 7 level against the dollar as the roaring rally in mainland equities continued unabated.
By close of trade in Asia, the yuan was quoted at 6.9845 to the dollar, its lowest since mid-March, on the back of another surge in mainland stock indices. The Shanghai Shenzhen CSI 300 closed up 1.4% and has now risen 17.8% so far this month.
The latest surge came after figures showing a bigger rebound in domestic price trends than expected, allaying fears of deflation in factory gate prices. Producer prices were down only 3.0% on the year in June, after being down 3.7% in May – a figure that now looks likely to mark the short-term bottom. Consumer prices also fell by only 0.1% in June, rather than the 0.5% expected.
3. Stocks set to open mixed; Walgreens, airlines in focus
U.S. stock are set to open mixed with one eye on the jobless claims numbers.
By 6:45 AM ET, the Dow futures contract was down 97 points, or 0.4%, while the S&P 500 futures contract was down 0.3% and the Nasdaq 100 futures contract was up 0.3%.
In the spotlight later will be Walgreens Boots (NASDAQ:WBA), which is set to release its quarterly numbers, as well as airline stocks. United Airlines (NASDAQ:UAL) said it may furlough up to 45% of its workforce, some 36,000 people, by October as a result of the drop in demand for air travel.
Also of note could be General Motors (NYSE:GM) and Fiat Chrysler (NYSE:FCAU) stock, after a judge rejected a GM suit alleging FCA had bribed union officials to get a sweeter deal on pay than its rivals.
4. Biden to speak, Trump to get Supreme Court ruling on tax returns
The Democratic Party’s presidential nominee Joe Biden will deliver a speech outlining some of his key economic priorities.
According to various reports, Biden will talk up “buy American” policies, especially as regards government procurement, while also signalling an expansion of healthcare coverage. There have been few details about his plans on taxes, which have been a major concern for investors in the past.
Biden’s opponent in the presidential election, Donald Trump, is meanwhile set to hear from the Supreme Court on whether his tax returns can be released to Congressional investigators and prosecutors. Trump has refused subpoenas from three House committees controlled by Democrats, as well as Manhattan District Attorney Cyrus Vance Jr.
5. Base metals shine as gold consolidates
Metals continue to post new highs on a cocktail of factors from fears of currency debasement by central banks to mine closures forced by the pandemic.
Gold futures were consolidating, down 0.3%, after hitting 9-year highs earlier in the week, but the world’s two most important base metals – Copper and Aluminum – both rallied on a wave of Chinese bullishness. Aluminum futures in London rose to their highest since March 11, while copper futures hit their highest level since April last year, helped in part by an announcement from Rio Tinto (NYSE:RIO) that it will close a smelter in New Zealand and put other facilities under review.
Copper prices are being squeezed, among other things, by the spread of Covid-19 around Latin America, where many of the world’s biggest mines are located.