(News Bulletin 247) – Wall Street is expected to open slightly lower on Thursday morning, under the influence of indicators confirming the strength of the job market and rising concerns about the health of the distribution sector.
Half an hour before the opening, futures contracts on the main American stock exchanges lost between 0.1% and 0.3%, announcing a start to the session in the red.
The ‘futures’ on the major New York indices were initially expected to rise this morning following the adoption, overnight, of the agreement to raise the debt ceiling by the House of Representatives.
Its elected officials adopted by a very large majority the agreement concluded with the White House in order to suspend the ‘debt ceiling’ which risked leading the United States to default on payment.
The agreement must now be considered by the Senate where the Democrats have the majority and to which all eyes will now turn.
But investors were also stunned by a series of statistics illustrating the resilience of the labor market, a factor likely to encourage the Fed to continue its rate hikes.
The private sector indeed generated 278,000 jobs in May, a figure well above expectations, according to the monthly survey published on Thursday by ADP.
As for registrations for unemployment benefits, they only increased by 2,000 during the week of May 22, to settle at 232,000 against 230,000 the previous week.
According to the CME Group’s ‘FedWatch’ barometer, investors now estimate a near 32% chance of another quarter-point Fed rate hike after the mid-June FOMC, versus 26% so far.
The consumer sector may find itself under pressure after the downward revision of the annual objectives of the Macy’s department store group.
Even Salesforce is expected to be in the red (-7% in pre-market quotes) despite the upward revision of its annual targets.
After a 69% gain since January 1, investors seem tempted to take profits on the enterprise software giant given the uncertainties that are currently accumulating around the state of the economy.
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